Pension funds can pool $15 billion for equity financing — NCB

Saturday, January 17, 2015

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NCB Capital Markets chief executive Steven Gooden wants pension funds to collectively invest $15 billion as equity in fast-growing businesses as a new source of funding in Jamaica.


"Look at the pension fund industry, that industry has north of $300 billion in assets under management. Imagine five per cent of that being allocated to financing private equity opportunities. That is $15 billion worth of funding, Think of the difference that could make for local businesses." Gooden made the comments while launching NCB Capital Quest reality TV series at the NCB Wellness Centre in Kingston on Thursday night.


The series aims to pump up to $50 million in equity in one of the businesses vying to win the reality show. The funding will primarily come from NCB Cap Markets along with Norbrook Capital Management Ltd led by Khary Robinson.


Jamaica's phase II of the Pension Reform seeks to create new rules of investment among other things. One of the key areas for debate involves allowing pension fund managers to invest up to five per cent of their total asset portfolio in a single security.


"However, to realise such an aspiration, there are components of the eco-system that need to be addressed --one of them being the legislative/regulatory framework, another being awareness among entrepreneurs as to what opportunities exist and how to position themselves to tap into private equity funding," Gooden said.


Building this awareness forms part of the subtext of Capital Quest. The series, which premieres this Tuesday on Television Jamaica, showcases seven entrepreneurs with businesses that earn between $10 million to $500 million in annual sales.


"We recognise that a lot of small and medium enterprises (SME) focus on bank transactions to grow their business [with] loans and credit directly from banks. So the TV programme is designed to encourage a different spread of financing so that the SMEs are not just focused on bank transactions but also look at equity financing and... even further to listing on the local stock exchange," stated Audrey Tugwell Henry, senior general manager of retail banking at NCB, at the launch.


The contestant businesses are Vein Centre of Jamaica, Lifespan Water, Carita Jamaica Ltd, Southside Distributors, Patwa clothing, Stationery Centre Ltd and MRDM Cosmetics.


"Imagine a bank doing a TV series," reasoned Nadeen Matthews chief executive of NCB Foundation and senior assistant general manager for strategy, marketing and communications at NCB, at the launch. "It is designed to be both entertaining and educational. We really did this to create a breakthrough [series] for us Jamaicans, to be part of this eco-system of complex relationships that will all come together to develop small businesses, as we develop the nation that we love so dearly."


The Capital Quest team includes executive producer and co-creator, Nadeen Matthews; director Mykal Cushnie; and production company, The Lab Inc, led by Kimala Bennett.



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