Managin g director of the Development Bank of Jamaica (DBJ) Milverton Reynolds indicates that the bank will continue to partner with fund managers who invest in growing ventures within the Jamaican economy and in the wider region.

To date, the DBJ has invested US$4.25 million in five funds which operate in Jamaica and the Caribbean. As at November 30, 2021, these funds have, in aggregate, over the past six years, raised some US$414.7 million from local, regional, and international investors, including some US$200 million, from the Jamaican investment community. To date, the five funds have invested approximately US$90.5M in 25 Jamaican businesses.

In a new request for proposals, the DBJ is seeking to seed two additional funds targeted at SMEs. These will fall under the SERVE Jamaica Programme, for which the Ministry of Finance and the Public Service (MOFPS) has made funding of some $2 billion available to the DBJ for investment in private equity funds investing in SMEs, in Jamaica.

The DBJ will utilise these resources to invest in at least two SME funds, managed by eligible private equity fund managers, who are then expected to raise funding from other private capital sources, of at least twice the value of funds invested by the DBJ.

The $2 billion will be used to leverage, at a minimum, an additional $4 billion in private capital funding resulting in, at least, $6 billion in private equity available for investments in SMEs.

The SME fund will be sector neutral; however, eligible sector-specific funds may be considered, Reynolds told the Jamaica Observer.

Through the Jamaica Venture Capital Programme, DBJ is seeking to be the catalyst for the development and growth of the Jamaican private capital investment ecosystem.

It has acted as anchor investor, since 2016, in five new private capital funds including private equity, mezzanine, private credit, infrastructure, and SME funds.

These are long-term funds. Only two of the funds to date have completed their investment period.

Milverton Reynolds stated, “As funds go through the cycle, over a ten-year period, of investing, creating value, reaping/exiting, it is too early in the cycle to assess performances of the investee companies.”

The DBJ has not yet invested in venture capital funds, which are focused on investing in early stage, high growth businesses, in particular tech companies.

Rather, the DBJ has invested in private equity and private credit funds, and similar. The DBJ does intend, however, during 2022, to issue a call for a venture capital fund managers, with investment funding from the BIGEE Project.

Boosting Innovation, Growth and Entrepreneurship Ecosystem (BIGEE) is a project financed by the Inter-American Development Bank (IDB) to be executed by the DBJ to finance economic growth of MSMEs in Jamaica. The DBJ said matching funds for private capital funds come from local, regional, and international sources. These investors include private investors such as family offices, pension funds, insurance companies, as well as public sector institutions and development finance institutions.