Mike Frerichs

Treasurer

Statewide, IL

Mike Frerichs was elected Illinois State Treasurer in 2014. As an Illinois State Senator from 2008 to 2014, he served an active voice on behalf of Illinois’ farming community as Chairman of the Agricultural Committee, advocating for advancements in clean bio fuels.

During his time in the legislature, Mike focused on a number of ideas to spur economic growth.  He led an effort to improve tax incentives that encourage businesses to locate in high unemployment areas; he worked to increase science and math education standards in Illinois high schools; and he championed the Emerging Technology Industries Act, a bill that would provide grants to private-sector entities that grow jobs through innovations in medicine or science.

Prior to running for office, Mike taught at his alma mater high school and managed a local safety engineering company, Smart Structures. Later he was elected twice to the Champaign County Board and spent more than four years as Champaign County Auditor, where he became a Certified Public Finance Officer, the only elected Auditor to receive that designation in the state. Mike also served as a volunteer firefighter and on the board of a local nursing home.

Pro-Growth Progressive Ideas Shared

Problem

Government investment officers face difficult choices. Not only do they seek investments that are safe and high-performing, but they seek – and their constituents demand – investments that are responsible. They seek investments that not only strengthen the economic well-being of their community, but they seek investments that reflect their community’s values, contribute to admirable ends, and advance the greater public interest. 

The problem is that traditional investment strategies fail to incorporate these priorities, often described as environmental, social, and governance (ESG) factors. Traditional investing heavily relies on financial indicators, technical data, and short-term gains. While those factors are certainly necessary, government investment officers need a way to integrate additional factors into the investment process if they strive to fully execute their fiduciary duties. In other words, they need a new strategy, one that not only is good for business, but is also good for the community

Solution

Raising The Bar (RTB) represents the future of government investing. RTB is a highly replicable public investment strategy that empowers governments to maximize returns and reduce risk exposures all while focusing on corporate accountability, innovation, and the common good. The strategy also recognizes that sound environmental, social and governance policies are strongly related to safer, more innovative, better-performing companies. 


Problem

Student loans are a burden which prevents many from fully participating in our economy and which can make higher education inaccessible in the first place. Student loan debt delays home purchases, business start-ups and other major economic investments. And the fear of accruing debt can prevent students from enrolling or completing a degree.

Seventeen percent of Illinois residents – more than two million people – carry student loan debt, the median value of which is $17,748. Twelve percent of those borrowers have student loan debt in collections. Refinancing private loans and investing in new financing tools are opportunities for the state to earn a reasonable investment return while supporting the aspirations of our residents.

Solution

Alleviating debt for Illinois borrowers will generate increased personal investment and fuel our state’s economic growth. We currently run several programs which increase access to capital in alignment with our mission and priorities. We can do this because our expected return on investments in the state portfolio is relatively low – in the range of 2-3 percent. For this program, our office will use up to five percent of our investment portfolio (approximately $600 million) to invest in student loans. With our relatively low expected return, we can refinance private student loans on advantageous terms for the borrower and establish pools of funds for promising new higher education financing programs, such as income share agreements.


Problem

Sustainable investing reverses the trend of focusing narrowly on financial results and instead takes a holistic view of investment. This is appropriate given the wide range of risks from climate change and other social factors that have and will continue to impact corporate performance. More than four-fifths of companies anticipate being impacted by climate change. Impacts will be felt across industries in a variety of ways, from logistics interruptions to increased operating costs to more limited resource availability and stranded assets. With a sustainable investment policy, public fund managers will not be caught between their responsibility to maximize investment returns and their responsibility to be good stewards of their communities.

Solution

Investment policy can align financial interests to address climate risks. By integrating relevant factors into decision-making, public fund managers minimize risk, maximize returns and meaningfully impact corporate, social and environmental outcomes. This Act codifies sustainable investing as a best practice. It enhances fund managers’ ability to fulfill their fiduciary duties by improving portfolio performance while benefiting our communities and the world by investing with regard for climate risks and social impacts. From our framework, public fund managers can develop tailored sustainable investment policies along with the specified factors for consideration, including climate and environmental risks, social impacts and firm governance.