Mr. Nick Ashmore:

There are two main factors which underpin confidence among businesses as they seek to develop their operations. First is their own sense of their financial capabilities and their instability of operation and second is their sense of opportunity. Is there an opportunity that is well defined and well understood on which one can take a risk and be confident of making a return by borrowing or taking out more equity to make an investment? There is still a sizeable cohort of businesses suffering the hangover of the boom in terms of exposure to real estate and real estate investments they may have taken on. We are aware that banks are working their way through resolving those books and trying to stabilise their situations as quickly as they can, and I think they are substantially through that process now. That is a factor in the number of businesses that are prepared to start looking forward as opposed to looking over their shoulder and wondering when the banks will come and tap them on the shoulder, so to speak. I think that is starting to improve.

In terms of opportunities, we can only reflect on the flow that is coming in the door. That certainly seems to be picking up in terms of businesses coming to us with ideas and seeking capital to make investments and to start building out and growing. On that front it is starting to improve. We also look closely at the quarterly SME lending surveys in which the Department of Finance engages. They show a pick-up in demand for finance by SMEs. I think that reflects both of those sets of changing conditions.

To elaborate just a little, we are tracking within our own operation - this is a mix of direct investment ideas but also of fund investment ideas - more than 60 opportunities which are in the pipeline.

Approximately two thirds of these are what we call radar opportunities, which are opportunities we are only starting to understand and develop. We run economic analysis on these opportunities so that we can see what type of economic impact they would have. There are approximately 25 different stages to our due diligence, legal review and approval process. We have to take these opportunities to the Commission in the first instance and, ultimately, once the legislation has been amended, to the new ISIF governance structure.

I hope that provides members with an idea of the volume of opportunities we are seeing. Many of those are funds which will go on to make ten to 30 investments themselves. Not all of them will work because not all of them are good ideas. Some are good ideas and others are less good. We endeavour to respond negatively if we believe a proposal is not viable.