The Secretary of Finance and Enterprise Development today announced that the Tobago House of Assembly, having understood the need to provide equity capital as a means of mobilizing participation in the Cove Eco-Industrial Park and elsewhere in Tobago, has initiated a Tobago House of Assembly Venture Capital Company. The Tobago House of Assembly Venture Capital Equity Fund Limited was registered pursuant to the Venture Capital Act, effective November 17, 2010. Its primary function is to facilitate the diversification of the Tobago economy away from the overdependence on tourism, while maintaining the island’s pristine environment.
Venture capital companies are private equity organizations comprised of individuals and companies putting up money at risk, to invest in early-stage, high potential, growth companies with a view of generating returns. These are also inclusive of companies outside of Cove’s niche areas. Thus, the Tobago House of Assembly, as the pioneer of this project, has committed TTD$25 Million to the Fund and will be seeking private sector investors to grow the fund to TTD $100 million in the shortest possible time. The company will be governed by legislation of 1994 chapter 81:08 as amended by Act 13 of 2005, which speaks to 25 % tax credit, share capital of $50,000.00 to $100M for investors among other criteria.
The objectives of the fund are to:
1. Encourage participation in the economic diversification of Tobago;
2. Provide an alternative to debt financing;
3. Partner with inward investors in developing market opportunities in Tobago;
4. Build a highly profitable equity portfolio as an efficient hedge against inflation; and
5. Deliver an above average after-tax return on investment to medium to long-term investors.
A Board of Directors will soon be appointed by the Executive Council; and the day-to-day management of the company is likely to be outsourced to an investment advisor, who will in turn lead the efforts in attracting investors, identifying opportunities, structuring investment deals and formulating the administrative core of the Company.
The ultimate objective of this initiative is to secure global interest and potential investors for the Cove Industrial and Business Park and, by extension, enterprises operating elsewhere in Tobago. In the interim, the Company, by definition will seek to create value through investor contributions, allowing a maximum of thirty-five investors as a private company.