CIRI’s private equity and securities investments portfolio currently is comprised of publicly traded securities and private equity funds that are comprehensively analyzed and selected for their strength and growth potential.
“The company has in recent years maintained about one-third of its assets in a diverse portfolio of private equity, marketable securities and venture capital investments,” said Patrick Duke, CIRI chief financial officer. “These investments lost significant value when world financial markets crashed in fall 2008. However, when tax benefits are included, CIRI’s private equity and securities portfolio has recovered the value it lost during the crash.”
CIRI started investing in private equity in 1997 as a means to diversify its overall portfolio. Private equity and venture capital funds are managed by third-party managers who raise funds from institutional investors and large pension funds. This money is typically then invested in privately held companies or used to conduct buyouts of public companies.
CIRI’s private equity portfolio currently includes fund investments with the Carlyle Group, Kohlberg Kravis & Roberts and Hellman & Friedman. CIRI has diversified its private equity interests to include global power and energy, clean energy, distressed debt, European investments and financial services sector investments. CIRI’s private equity investments have generated more than $100 million in earnings since 1997.
In 2009, CIRI invested $5 million with the Westly Group, a private equity fund that invests in clean technology. Westly’s holdings include interests in Amyris, an alternative fuels company. CIRI also made a $10 million direct investment in Codexis, a California-based biotech company that specializes in developing clean technology for the biofuels, pharmaceutical and air treatment markets.
CIRI’s marketable securities portfolio includes a diversified mix of domestic and international stocks, U.S. and corporate bonds and cash. Marketable security investments can be liquidated on short notice and converted to cash.
CIRI uses its marketable securities portfolio to generate earnings while maintaining sufficient liquidity to fund current operations, shareholder dividend payments and new investment opportunities. CIRI expects its marketable securities portfolio to shrink in the near term as it increases its investments in operating businesses.