PROVIDENCE, R.I. – The State Investment Commission today announced Fidelity Investments was selected as the vendor for the Ocean State Investment Pool (OSIP). The OSIP will help the state and municipalities better manage and improve the investment performance of their liquid assets. The SIC voted 7 to 0 approve, with one abstention.
Liquid assets are used by the state and cities and towns for day-to-day operations, such as payroll, operating expenses and capital projects.
"In these challenging times, the Ocean State Investment Pool will help local government leaders across the state invest their cash and other liquid assets," said General Treasurer Gina M. Raimondo, who chairs the State Investment Commission. "This program will allow Treasury to extend its expertise to municipalities and improve investment returns by creating economies of scale."
Over the next several months, Treasury and Fidelity Investments will finalize its contract and investment policies as well as work to educate cities and towns about the benefits of joining the pool. Treasury expects to launch OSIP as early as the first quarter of 2012.
This voluntary initiative will be a safe, liquid, convenient and low-cost investment vehicle. Treasury estimates that across state and municipal governments, there is more than $500 million in funds that could be appropriately invested in this vehicle. If the fund is able to enhance returns by just two-tenths of one percent, that could mean $10 million to $15 million in new potential revenue to participants over a 10-year horizon. Approximately 44 out of 50 states operate some form of a local government investment pool.
The legislation to create OSIP was passed into law by the General Assembly in June.