By McPherse Thompson, Staff Reporter
A venture capital fund being established by the Government for investment in the information technology sector, could be established within another three weeks, with Caribbean Equity Partners as interim managers.
The firm has been asked to manage the fund while a team of Irish business and financial consultants, now in the island, complete a study on the Jamaican environment with a view to advising the Government on how best to set up the fund.
According to JAMPRO's director of marketing services, Clifton Brown, a committee, on which he sits, has been selected to try and establish the fund as quickly as possible.
However, Mr. Brown said they first wanted to learn why three venture capital funds set up in the past had not lived up to expectations, as well as getting information from the business sector about the ingredients they have in place to make it successful.
Minister of Industry, Commerce and Technology, Phillip Paulwell, against the background of the need of the private sector to assist in the development of new office space for the IT sector, spoke to the provision of the venture capital fund last week during the opening of the Cazoumar Free Zone, a technology centre in Montego Bay.
In a telephone interview with the Financial Gleaner yesterday, Mr. Brown said tenders were invited both locally and internationally to conduct a study on setting up the venture capital fund. Financial and business consultants Columbus Associates of Dublin, Ireland, which has implemented similar funds "all over the world", was selected from among several companies which responded, said Mr. Brown.
The JAMPRO executive said the consultants, who are now in the island, will be studying the Jamaican environment and then make recommendations on how best to fully establish the fund.
He said the permanent establishment of the fund would take about another nine to 12 months and would be dependent on the outcome of the study. However, "we are also discussing an interim management of the venture capital fund with Caribbean Equity Partners," said Mr. Brown.
Although Mr. Paulwell indicated that the venture capital fund would be to the tune of $500 million, the interim arrangement with Caribbean Equity Partners calls for it to be deposited in tranches, starting with an initial sum of about $50 million, "and see how they manage it," Mr. Brown said.
The JAMPRO marketing director said principals of Caribbean Equity Partners have indicated that they would match the initial deposit with $50 million of their own funds.
Mr. Brown said the study to be undertaken would not just focus on the establishment of the venture capital fund, but on how to develop a venture capital industry because they wanted to see as many players as possible investing in the venture capital market.
Asked whether Trafalgar Development Bank (TDB) was still interested in managing the fund, Mr. Brown said representatives of the bank spoke with the committee "a couple of times and we are still talking to them."
The venture capital fund is being set up to assist particularly businesses interested in investing in the information technology industry, and is a concept which usually means providing financial support to ventures for between five and 10 years.
