Fri | Dec 2, 2016

DBJ recruiting fund managers to create venture pool

Published:Friday | September 5, 2014 | 12:00 AM

Avia Collinder, Business Reporter

The Development Bank of Jamaica (DBJ) is seeking asset managers to raise and manage venture capital funds for equity investment in start-ups and businesses seeking to expand.

The first call for proposals was issued mid-year. In line with international experience, the DBJ hopes each qualified recruit will raise about US$20 million, but says it is not a stipulation.

The bank said proposals are coming in but declined to speak to their origin until the bid closes on September 19.

DBJ will contribute seed capital to each venture fund created, and while it has placed no limits on the number of applicants who can qualify, DBJ says its overall participation would be limited to $1 billion (approx US$9 million) to be distributed over five years among all qualified fund managers.

The bank is joined in its hunt for fund managers by a panel of private-sector companies, which have also committed to provide seed capital for venture funds targeting business segments in which they are interested.

The venture capital investment panel includes Sagicor Group, JN Fund Managers Limited, Pan-Jamaican Investment Trust Limited, ICD Group, Musson Group of Companies, Capital Options Limited, JMMB Group and GraceKennedy Financial Group. None are permitted to apply under the call for proposals.

Fund managers who apply will be scrutinised by the investment panel, members of which will then decide how much to invest in each fund. The DBJ will invest no more than 25 per cent in each fund and has proposed that private-sector involvement in each be at least 20 per cent. The fund manager must invest at least two per cent of the amount proposed.

Audrey Richards, project consultant with the DBJ-Jamaica Venture Capital Programme, says the investment panel is targeting dedicated fund management companies.

But start-up fund managers are welcome to apply as well, she said, so long as they have a good plan and strategy.

appropriate qualities

"A new fund manager with experience in, say, the technology sector, who plans to invest in technology companies and who has the ability to put together a team with the appropriate qualities, could be considered," Richards said.

The DBJ plans to issue a call for fund managers every year.

Once operational, fund managers will invest in what the DBJ describes on its website as "high-potential, late-stage, established companies which have proven business concepts and require capital to expand operations, develop new markets, processes and/or products and ultimately create value-added production and increased employment in the local market".

The venture capital project is spearheaded by the DBJ, with funding and technical guidance by the Inter-American Development Bank and the World Bank.

Fund managers must be licensed by the Financial Services Commission to qualify, including foreign firms, each of which will also be required to register in Jamaica as an overseas company.

avia.collinder@gleanerjm.com