Key Takeaways
- • Jamaica's government has revised the governing framework to allow pension funds to invest up to 5 per cent in venture capital, according to Finance Minister Dr. Nigel Clarke.
- • Clarke said the change could enable trustees to direct about $25 billion into venture capital, based on roughly $550 billion in pension fund assets.
- • PIOJ Director General Dr. Wayne Henry described the decision as a "positive development" that could boost investment, economic activity and sustainable growth.
- • Clarke framed the move as a "game changer" that addresses the absence of institutional capital for venture and risk-taking activity, and said pension liabilities can no longer be met solely through Government paper.
Summary
Planning Institute of Jamaica (PIOJ) Director General Dr. Wayne Henry has welcomed the Government's decision to revise the governing framework so that pension funds may invest up to five per cent of their assets in venture capital. Speaking to journalists at a quarterly media briefing at the PIOJ's New Kingston head office on Wednesday, November 21, Henry said the move augurs well for Jamaica by facilitating investment opportunities that could spur economic activity and sustainable growth. He noted that Jamaica is not short of the entrepreneurial ambition and willingness to take risks needed to implement ideas.
Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, announced the change at a Compete Caribbean Partnership Facility (CCPF) forum in Kingston on Tuesday, November 20. Clarke said the measure would allow trustees to invest $25 billion in venture capital to finance business start-ups, based on the $550 billion held in pension funds. He said the decision responds to the non-existence of institutional capital for venture and risk-taking activities, and described it as a "game changer" for business opportunities, innovation and growth, given existing restrictions on how pension funds can be deployed.
Clarke stressed that pension funds will no longer be able to meet liabilities by investing in Government paper, stating that "you are going to have to take risks." He added that "financing is the oxygen of business."
Venture capital, as described in the report, is private equity financing directed at small, early-stage firms with high growth potential or demonstrated high growth in employees and/or annual revenue.
Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, announced the change at a Compete Caribbean Partnership Facility (CCPF) forum in Kingston on Tuesday, November 20. Clarke said the measure would allow trustees to invest $25 billion in venture capital to finance business start-ups, based on the $550 billion held in pension funds. He said the decision responds to the non-existence of institutional capital for venture and risk-taking activities, and described it as a "game changer" for business opportunities, innovation and growth, given existing restrictions on how pension funds can be deployed.
Clarke stressed that pension funds will no longer be able to meet liabilities by investing in Government paper, stating that "you are going to have to take risks." He added that "financing is the oxygen of business."
Venture capital, as described in the report, is private equity financing directed at small, early-stage firms with high growth potential or demonstrated high growth in employees and/or annual revenue.
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