The Guinness Ulster Bank Equity Fund, which has assisted in the creation of 350 jobs since it was set up in 1998, is set to realise a minimum return on investment (RoI) of 1.75 times the amount invested when it closes in 2006, says NCB Ventures.
NCB Ventures, the venture capital arm of stock-broking firm NCB Group, says the investors in the €7.6m fund – which include Guinness Ireland, Ulster Bank and Enterprise Ireland – have seen their funds invested in 12 early and expansion-stage companies.
The companies include Macalla Software, Magnetic Solutions, National Linen and Biotrin.
The investments were made across a number of industry sectors, including engineering, industrial automation, software, healthcare, language training and support services.
Michael Murphy, chief executive of NCB Ventures, commented: “We are delighted our investment strategy has produced a strong absolute performance for our investors in what turned out to be a challenging investment cycle for technology companies in particular. We backed many excellent management teams and were pleased with the level of job creation in portfolio companies and the geographical spread of investments which spanned Dublin, Cork, Clare, Galway and Mayo.”
Murphy said a key element of the fund’s strategy was to invest across a range of sectors and to invest in a mix of companies at start-up and expansion stages of development. The sectors included engineering, industrial automation, software, healthcare, language training and support services.
“As the overseas demand for software weakened in 2001 and 2002 demand for products and services addressing healthcare and infrastructural needs surged and we had investees addressing all these market sectors.
“Looking forward, the growth in the international traded-services sector coupled with strong domestic growth will mean entrepreneurs will be seeking venture capital funding to finance the strong pipeline of knowledge-intensive projects. In recent times we have witnessed a growing inclination amongst Irish investors to allocate a greater proportion of their investment funds to private equity. A vibrant venture capital industry is a critical component of a knowledge-based economy,” said Murphy.
By John Kennedy