As the CIO for a state treasurer’s office that manages nine separate investment pools totaling more than $65 billion, Joe Aguilar has been tasked over the last four years with institutionalizing operations and building out the manager selection team.

Aguilar’s work—under Illinois State Treasurer Michael W. Frerichs, the sole trustee for the investment pools—covers investment implementation, including the development of processes and procedures, the funds’ asset allocations and a sustainable investment strategy. He also oversees the selection of investment products and managers.

Because he previously served as director of investment analysis and due diligence with the Illinois State Treasury, joining in 2016, Aguilar learned the needs of each different account. They include: the 529 education savings plan; a pool for the state’s ABLE [Achieving a Better Life Experience] accounts that benefit people with disabilities; the Illinois Secure Choice retirement savings program for private sector workers who lack access to a private retirement plan; the First Fund dedicated to strengthening Illinois’ infrastructure and real estate; the Illinois Growth and Innovation Fund, an evergreen impact investment fund that invests to attract, assist and retain technology businesses in Illinois; and the local government investment pool.

The variety of mandates can be challenging, Aguilar says.

“Our organization is small for the level of assets we manage … and we have been dynamic and have shown the ability to manage these different tasks while taking more management, due diligence and oversight in house,” he says.

To ensure the team can do what is asked, Aguilar has made talent development a main focus, “to ensure we have the next generation of leaders in house while building sophisticated investors to think outside the box when reaching for alpha.” That alpha is intended to benefit the state through two of the state funds.

The Illinois Growth and Innovation Fund is a $1.5 billion fund of state assets designed to allocate capital, in perpetuity, to Illinois venture capital, growth equity and private venture debt investment firms with the goal of investing in tech-enabled businesses seeking to locate, expand or remain in Illinois.

The First Fund invests 5% of the state portfolio to create and maintain infrastructure and real estate assets within the state. Investment themes include affordable housing, especially workforce housing; the clean energy transition; and infrastructure, including infrastructure that enables further growth of artificial intelligence businesses in Illinois.

Aguilar says the opportunity to recycle capital locally is important, and as the overall state portfolio grows, the 5% share grows, enabling the office to do more over time.

The two funds have what he calls “co-linear goals” that involve market-based returns and “driving more investment from the private sector in local infrastructure projects, as well as closing the gap between demand for project financing and the supply.”

Asked about the overall goals for the office’s work, Aguilar points beyond asset class specifics to problem-solving. Specifically, he highlights removing artificial hurdles that prevent quality firms from getting past the first screen.

“We are all looking for opportunities to add value, and sharing ideas around how we have successfully been able to invest in newer firms may help other CIOs identify unique opportunities,” Aguilar says.

—Amy Resnick