The Government is to make changes to regulations governing pension funds to free up twenty-five billion dollars ($25-Billion) for venture capital investment.
Minister of Finance, Dr. Nigel Clarke says the Government of Jamaica will revise investment limits to allow pension funds to invest in venture capital, which they are currently restricted from doing.
Dr. Clarke was speaking at the Compete Caribbean Partnership Facility’s (CCPF) dialogue on unleashing innovation in Jamaica at the Courtyard Marriott Hotel on Tuesday, November 20, 2018.
The Finance minister said: “The institutional capital available to pursue growth inducing, risk-taking activities is severely limited. There is great need to expand access to capital to those who are committed and motivated to pursuing their innovations. For that reason, we are going to change the investment limits for pension funds so that they can invest in venture capital.”
Dr. Clarke said the limit will move from the present zero percent to five percent of the J$550 Billion in pension funds in Jamaica.
“When we move the limit from zero to five percent, based on the J$550 billion in pension funds, over J$25billion in capital will be available for investing in venture capital. That is a game changer for innovation, for opportunity, and for growth,” he noted.
Additionally, the Finance Minister said that in the context of entrenching macroeconomic stability, it is no longer possible to satisfy pension liabilities by investing in government bonds. “As such, we are going to have to take risks and so we are going to allow pension funds trustees to take risks,” he said.
Dr. Clarke said that, “Jamaica is hitting the ground running as there is innovation, enterprise, and discovery already taking place in Jamaica.”
CCPF is a partnership between the Caribbean Development Bank, Canada, Inter-American Development Bank and the UK Department for International Development.