Cantillon: Ireland is open for business

€125 million State-backed investment fund to back medium-sized Irish businesses.

Richard Bruton, our relentlessly jolly Minister for Job Announcements, looked particularly pleased with himself yesterday at the launch of the new €125 million State-backed investment fund for medium-sized Irish businesses.

Richard Bruton, our relentlessly jolly Minister for Job Announcements, looked particularly pleased with himself yesterday at the launch of the new €125 million State-backed investment fund for medium-sized Irish businesses.

 

Richard Bruton, our relentlessly jolly Minister for Job Announcements, looked particularly pleased with himself yesterday at the launch of the new €125 million State-backed investment fund for medium-sized Irish businesses.

The fund will take equity stakes in medium-sized Irish firms with growth potential. The State agency Enterprise Ireland has coughed up a quarter of the fund, while AIB, which may as well be a state agency, has committed €20 million.

The rest of the cash will come from foreign investors, surely the main reason for Bruton’s jollity.

It is one thing to have foreign investors crawling all over the country seeking out distressed asset buys, building Viagra factories or coining it on Irish Government bonds. It is another thing altogether to attract foreign cash into the State to be risked on existing indigenous, growing businesses.

During the boom, the capital structure of the entire economy became lopsided. Much of the equity that would ordinarily have been available to invest in growing Irish businesses was diverted instead towards property deals, where the returns were much higher.

This forced many growing Irish firms to rely too heavily on debt financing instead, although if there wasn’t a property angle to the deal the banks were less interested. How ironic, then, to see that the property industry is effectively barred from applying to the fund launched yesterday.

The €125 million is just a tiny fraction of the cash needed to help alleviate the capital famine that has starved the indigenous economy in recent years.

But it’s a welcome start.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.