Government to Catalyse about S$500 Million of Private Equity Funds to Nurture Globally Competitive Companies through the Co-Investment Programme02 Dec 2010
First phase of Co-Investment Programme will see Government seeding up to $250 million of capital to facilitate the growth of Singapore-based enterprises
The Ministry of Finance today launched the Co-Investment Programme (CIP), to nurture globally competitive companies (GCCs) by catalysing the supply of patient growth capital to Singapore-based enterprises. This is in response to the Economic Strategies Committee's recommendation for the Government to catalyse supply of growth capital of up to S$1.5 billion to Singapore-based enterprises through co-investing with the private sector.
2. Under Phase 1 of the CIP, the Government will seed up to S$250 million of capital, which is to be matched by a similar amount of private-sector capital. This will bring the total capital catalysed under Phase 1 to about S$500 million.
3. The CIP will target a large spectrum of Singapore-based companies with diverse portfolios with revenues of up to S$500 million. It is expected that about S$200 million or 40% of total capital seeded in Phase 1 will be channelled to growth-oriented SMEs with annual revenues below S$100 million.
4. The primary mode of operation of the CIP will be through private equity funds, where the Government's capital will be managed and matched by private equity fund managers. Through this, the CIP relies primarily on the expertise and business networks of such fund managers, thereby ensuring commercial discipline in investments. Some of the capital will also be used to co-invest with these fund managers on a deal-by-deal basis.
5. Temasek Holdings, through its wholly-owned subsidiary Heliconia Capital Management Pte. Ltd., will manage Phase 1 of the CIP and engage prospective private equity fund managers over the next few months on participation in the CIP. In addition, Temasek Holdings will participate as a co-investor in the CIP.
6. Second Minister for Finance Mrs Lim Hwee Hua said "The Co-Investment Programme will contribute to the expansion of SME financing through incentivising private equity financing. This will catalyse an increase in the pipeline of investible enterprises. It will facilitate the growth of SMEs into Globally Competitive Companies, and also create a landscape to boost Singapore's value proposition as a base for enterprises to anchor and internationalise."