Ms Regina Breheny:

We are not vulture capitalists; we are venture capitalists. We build businesses; we do not take them apart. One reason the industry has evolved and developed is that it builds very successfully on technology and teams with expertise. We are good at this for two reasons. First, the State has been very supportive in terms of providing capital when the private sector had pulled away and also in terms of establishing seed funds. As part of the recapitalisation of the banking system, the banks were asked to put up some funding. The State, through Enterprise Ireland, put up funding and the seed funds were created. The management of the funds was made the responsibility of the commercial VCs. That brought on board a significantly improved and expanded pipeline of new start-up companies, which were there for the taking and the growing. On top of that, the Irish VCs have had tremendous relationships with foreign VCs and were able to pull in the international capital. The two aspects came together to create a business that was much better than what was available in other European markets. That, in essence, is why we have been more successful.

The Vice Chairman is absolutely correct that one of the risks of capital market union is that if those concerned do not accept that hubs are the way to go and that Dublin is to be a significant one, it might pull capital away. That is a big risk. We will have to fight very hard to get the message across. Europe is listening. Two years ago, VC was being pulled into this horrible regulatory regime under the alternative investment management directive. At the very last moment, however, VC was carved out of it. Therefore, somebody is listening, paying attention to the benefits of VC, promoting it and trying to develop it in a way that means money is being put into SMEs, which is its job.

We are largely technology based because there was no great breadth in the Irish economy. Many companies that were on the stock market were doing fine and did not need VC. There has always been a VC industry but it moved more towards technology when the FDI sector became increasingly significant within the economy. There were teams of people coming out of the multinational companies with research under their arm looking for funding, and the VC industry was delighted to be able to support them and the technology. That is where the industry absolutely exploded over the years. One reason we have been really successful at technology investment is the preponderance of the FDI sector that was established here through the IDA.