Richard Bruton (Dublin North Central, Fine Gael)

I propose to take Questions Nos. 10 and 42 together.

The development capital scheme as outlined in the Action Plan for Jobs 2012 has been developed to complement the existing range of financial supports offered by Enterprise Ireland. Other initiatives are already in place for the provision of capital at the early stage and scaling phases and a clear market failure was identified in the availability of risk capital for established companies seeking to sustain growth and achieve greater scale. Longer term investment capital is not readily available to growth-focused companies in the form of debt or equity and there is little private equity funds or debt available to innovative small and medium-sized enterprises, SMEs. This situation has resulted in an equity gap, which is constraining the development of a key cohort of established growth companies. Development capital can be defined as equity funding for the expansion of established and profitable firms, that is, those that have passed the start-up stage.

It is proposed that the scheme will be launched and marketed by end of the first quarter of 2012. This will entail a call by Enterprise Ireland for expressions of interest from fund managers followed by a three-month period prior to a closing date. The timing of actual investments under the scheme will depend on the ability of the fund managers selected from the expressions of interest to raise the matching funding to "close" their funds and to commence investing. While both funds are development capital funds - there are two tranches - aimed at established companies, they will be managed by separate managers, thereby generating competition in the market. Investment in two funds also allows Enterprise Ireland to commit to two funds with slightly differing investment strategies, thereby benefiting the market.

The scheme will be demand led and will target the cohort of companies that are growth focused. It will be open to all firms in that cohort regardless of their location in Ireland. However, under the south-east action plan, Enterprise Ireland is taking steps to target opportunities for start-up and expansion among enterprises in the region. These are the sort of growth-focused companies that would avail of the fund.

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