States-backed firms will remain anonymous – P&R
COMPANIES that have received money from the Guernsey Investment Fund will not be named, Policy & Resources has said.
The GIF has had more than £14m. from the States since it was set up two years ago, P&R said in response to written questions from Castel deputy Richard Graham.
But the list of companies in which the GIF has invested is not public information due to commercial sensitivity.
The majority of the companies to have received investment are based in Guernsey and while the fund manager was a customer of one of these companies, ‘we are assured this is on an arm’s length basis,’ said P&R.
The fund was launched in February 2016, with the aim of achieving long-term capital growth and a commercial rate of return through investments with a Bailiwick of Guernsey focus or which could benefit the development of the Bailiwick.
Initially the money was available to technology and innovation companies, but this has now broadened to property. P&R said that opportunities for an infrastructure cell are being looked into.
A total of £65m. has been committed to the fund by the States – £25m. to the technology and innovation cell and £40m. to the property cell.
The money was made available as and when an investment was being made: ‘As of 31 December 2019, £14,111,842 had been called and invested into the Guernsey Investment Fund technology and innovation cell and £100,000 called and invested into the GIF Property Cell,’ said P&R in its answers.
One aim of the fund was that the States investment would be matched by an equal amount from private investors, and in another answer, P&R said that the property cell had a co-investment agreement with the Ravenscroft RED Fund, with the agreement that the two funds will both take part in property investments ‘generally on an equal basis’.
With regard to the technology and innovation cell, the manager is to raise additional commitments of £1 for every £2 committed by the States and this was raised before the fund was launched.
The money committed to the two currently active cells – a total of £65m. – will be drawn down as needed when investments and/or costs are made or incurred. The aim is for all the money to be drawn down inside the planned five-year investment period.
The committee said it was too early to assess the fund’s performance at this stage: ‘As with any investment in venture capital or private equity the success of the underlying investments will only be known once the underlying business plans have been implemented and given a chance to gather momentum,’ it said.
‘The fund is targeting to be fully invested within five years, with realisations taking place over the following five years.’
GIF is registered with the Guernsey Financial Services Commission as a closed-ended investment scheme, Deputy Graham was told, and has its own independent directors ‘who all have significant relevant experience’. However, the States as majority shareholder has considerable control in the appointment or removal of directors.
Reports are made to the committee annually but these are not made public since it is a private unlisted company.
Due diligence is carried out on companies initially by the fund manager but third parties may be called upon to assist in specific areas depending on the nature of the proposed investment.
Press releases updating progress by the fund are published on the Ravenscroft website at https://bit.ly/2uqMSgp.
