Key Takeaways
- • Epicenter, a Memphis-based nonprofit startup accelerator, has requested $10 million from Shelby County's pension fund and an undisclosed amount from Memphis's municipal pension fund to invest in a new venture capital fund seeded with $10 million from FedEx.
- • The organization has raised approximately $40 million to date and targets $100 million total for investment, with a stated mission to support 1,000 entrepreneurs by 2025, including 500 newly launched firms.
- • Both the city and county retained independent pension investment advisers—Wilshire Associates for the county and an unnamed adviser for Memphis—to evaluate Epicenter's management capabilities, investment strategy, and fiduciary suitability before any capital deployment decision.
- • Memphis's municipal pension fund exceeds $2 billion in assets, currently allocated among private investment managers across traditional asset classes; Shelby County's fund operates under a similar structure.
- • County Mayor Lee Harris expressed general support for the concept of deploying local pension capital into Memphis-based businesses that could generate employment and tax revenue, though the final investment decision timeline remains unclear.
Summary
Epicenter, a nonprofit organization spun out of the Greater Memphis Chamber's Chairman's Circle in 2014, is seeking to deploy local pension capital into a dedicated venture capital fund targeting Memphis entrepreneurs. The organization has formally requested $10 million from Shelby County's employee pension fund and an unspecified allocation from the City of Memphis's municipal pension fund. The proposed investment vehicle is already capitalized with $10 million from FedEx Corp., according to city and county officials.
Epicenter's investment thesis centers on supporting early-stage local entrepreneurship. The organization has established an ambitious target: aiding 1,000 entrepreneurs by 2025, with at least 500 representing newly formed businesses. To date, Epicenter has accumulated approximately $40 million in commitments and intends to raise capital up to $100 million, according to Epicenter President Leslie Lynn Smith.
Both municipalities have taken a measured approach by engaging independent advisers to evaluate the proposal. Shelby County Mayor Lee Harris confirmed that Wilshire Associates—a prominent pension consulting firm—has been retained to assess Epicenter's management team, investment strategy, and capacity to properly oversee a venture capital fund. The City of Memphis similarly engaged an investment adviser to conduct due diligence on the request. These advisers will evaluate whether the deployment meets fiduciary standards applicable to public pension funds. The timeline for completion of these reviews has not been established.
Harris expressed qualified support for the initiative's underlying logic, noting that investing pension assets in local businesses capable of generating employment and expanding the tax base aligns with long-term municipal interests. However, he acknowledged uncertainty regarding Wilshire Associates' formal recommendation. Memphis's municipal pension fund currently manages assets exceeding $2 billion, allocated among multiple private investment managers responsible for traditional equity, fixed income, and alternative asset positions. The county fund operates under a comparable diversified management structure, with Harris having previously explored adding Memphis-based Preserver Partners to the manager roster.
The proposal represents a departure from typical pension fund allocation practices, which prioritize geographic and strategy diversification. The outcome will likely depend on whether Epicenter can demonstrate investment performance standards, governance protocols, and risk management capabilities equivalent to institutional-quality venture managers.
Epicenter's investment thesis centers on supporting early-stage local entrepreneurship. The organization has established an ambitious target: aiding 1,000 entrepreneurs by 2025, with at least 500 representing newly formed businesses. To date, Epicenter has accumulated approximately $40 million in commitments and intends to raise capital up to $100 million, according to Epicenter President Leslie Lynn Smith.
Both municipalities have taken a measured approach by engaging independent advisers to evaluate the proposal. Shelby County Mayor Lee Harris confirmed that Wilshire Associates—a prominent pension consulting firm—has been retained to assess Epicenter's management team, investment strategy, and capacity to properly oversee a venture capital fund. The City of Memphis similarly engaged an investment adviser to conduct due diligence on the request. These advisers will evaluate whether the deployment meets fiduciary standards applicable to public pension funds. The timeline for completion of these reviews has not been established.
Harris expressed qualified support for the initiative's underlying logic, noting that investing pension assets in local businesses capable of generating employment and expanding the tax base aligns with long-term municipal interests. However, he acknowledged uncertainty regarding Wilshire Associates' formal recommendation. Memphis's municipal pension fund currently manages assets exceeding $2 billion, allocated among multiple private investment managers responsible for traditional equity, fixed income, and alternative asset positions. The county fund operates under a comparable diversified management structure, with Harris having previously explored adding Memphis-based Preserver Partners to the manager roster.
The proposal represents a departure from typical pension fund allocation practices, which prioritize geographic and strategy diversification. The outcome will likely depend on whether Epicenter can demonstrate investment performance standards, governance protocols, and risk management capabilities equivalent to institutional-quality venture managers.
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