Mon | Aug 21, 2017

Jamaica improves ranking in venture capital space

Published:Friday | July 7, 2017 | 7:00 AMSteven Jackson
Audrey Richards, project coordinator for the Jamaica Venture Capital Programme.

Jamaica improved by one spot to rank eighth among 11 countries in terms of the private equity and venture capital, or PE/VC, environment in Latin America, according to a recently released report.

Chile tops the list of nations in the report, while the Dominican Republic sits at the bottom of the ranking. Jamaica's improved ranking puts it on par with Panama and Argentina.

The report, titled Scorecard 2017-2018, was produced for the Latin American Private Equity and Venture Capital Association (LAVCA).

"One of Jamaica's strengths is registration and reserve requirements on inward investments. Continued efforts to boost the entrepreneurship ecosystem have been made," stated the report.

It adds that challenges for Jamaica include its lacklustre capital markets development, corporate governance, protection of intellectual property rights, and high levels of perceived corruption.

LAVCA's Scorecard ranks the venture capital and private equity environments of countries within the region against developed counterparts in the United Kingdom and Israel. Jamaica's overall score improved from 46 to 51 points, and moved it from ninth place to No. 8, in part because of efforts to improve and develop the business environment.

Pleased with ranking

"We are very pleased with this improved ranking, as our efforts in building the venture capital and private equity ecosystem are being recognised," said Milverton Reynolds, managing director of state-run Development Bank of Jamaica, which oversees the project to create a private equity and venture market through the Jamaica Venture Capital Programme.

Jamaica saw upgrades in three indicators, including the general framework for PE/VC fund formation, bankruptcy procedures, and regulation allowing local institutional investors to invest in PE/VC funds. One of Jamaica's strengths was noted as registration and reserve requirements on inward investments.

"This is very good news for us and will propel us to continue the work we began in 2012," said Audrey Richards, project coordinator of the Jamaica Venture Capital Programme.

"The focus over the next three years is to ensure that we continue to improve the ranking by targeting the areas recognised as 'challenges' - capital markets development, corporate governance, the protection of intellectual property rights, and perceived corruption," she said.

In addition to managing the venture capital project, DBJ serves as an anchor investor and, to date, has provided backing of US$1.75 million in two funds - Portland JSX Limited II and Caribbean Mezzanine Fund 1. A third undisclosed fund will shortly commence operations, the development bank said.

"We want to use this opportunity to pay tribute to our local partners - our hard-working entrepreneurs, government agencies, the regulators, the legal fraternity, fund managers, investors, business service providers and international development partners, Multilateral Investment Fund of the Inter-American Development Bank, and the World Bank," Richards said.

steven.jackson@gleanerjm.com