Venture capital firms need greater financial support from the major pension funds to prepare rising technology companies for stock market flotation. Mr Niall Carroll, Chairman of the Irish Venture Capital Association, has called for a new injection of funding from financial institutions, similar to that meted out by pension funds in 1994.
In that year, the pension funds committed to invest 0.08 per cent of their assets, about £10 million per year, into venture type projects, following negotiations with the then Minister for Finance, Mr Ahern.
Speaking at the Venture Capital Association's annual dinner, Mr Carroll pointed to the recent "impressive growth by a number of indigenous-owned Irish technology companies".
"Even though they often receive less funding, because of their fast growth rate, technology companies regularly outstrip non-technology companies. We need the pension funds to commit money again, and continue their support in the future," Mr Carroll said.
Mr Carroll highlighted the US example, where many pension funds provide between 3 and 5 per cent of their assets under management to venture capital companies. The British figure is slightly lower, but both allocations are higher than those provided by Irish investors.
"Because the pension funds own assets have grown substantially, the percentage allocation could still remain lower than in other countries while satisfying, to a degree, the needs of Irish industry," Mr Carroll said.
In the last year the amount of money invested by members of the Venture Capital Association has increased from £25 million to £30 million, with the figure forecast to increase to £40 million next year. A significant proportion of this money goes towards Irishowned technology companies.
Labour TD and former minister for finance, Mr Ruairi Quinn, addressing the association, agreed access to venture capital was crucial to ensuring continued growth. "The Government must build upon steps that have already been taken in this area to ensure further growth and development in the future," he said.
