‘… and the joke was that they couldn’t find anything to invest in!’
Wednesday 17th September 2014
But it’s no joke. According to a story in this morning’s Irish Times by Tom Lyons a €100m fund, run by the National Pension Reserve Fund (NPRF) and UK investment firm Better Capital, which was set up to invest in turning around Irish SMEs, is to be wound down in December after ‘failing to find any company to invest in over two years’.
Couldn’t find any company to invest in? Why didn’t they contact ISME? We have 9,000 members whose businesses could always use finance to expand and create more jobs. We simply cannot believe that they couldn’t find one, just one, company worthy of investment?
The fund was described by the NPRF at launch as being set up to invest in “underperforming businesses which are at or close to insolvency but have the potential for financial and operational restructuring”. According to the article The NTMA (the NPRF is a subsidiary) said the fund had been set up with a lifespan of two years, with the intention of investing in distressed businesses but that positive changes in the economy meant it saw few potential investments.
There are over 200,000 SMEs in Ireland. Thousands and thousands of them are distressed. If you threw a dart at an office park or industrial centre anywhere in Ireland you couldn’t but hit a distressed company, vulnerable but still viable, with the potential to turn around, if only they had access to capital.
Does the NTMA not cringe when they are forced to put out statements like this while another arm of the same State agency is still grappling with failing businesses, overburdened with bank debt? Is there not a hint of self-awareness that it simply makes no sense? And, as is still the practice, the NTMA was not forthcoming as to how much it has cost to run their half of the fund for the last two years. Why? Did it cost €100,000 or €1,000,000? Why can’t they tell us? It is our money after all.
And even though the fund has failed to find an investment in two years, Tom Lyons (@TomLyonsBiz) reports that the NTMA said, “… the two parties will continue to collaborate in respect of turnaround investment opportunities in Ireland post-December 2014”. So no loss of a State job for someone with nothing to do? Even though Better Capital is closing its Dublin office in December?
We’ve kept the worst wine till last though. The NTMA said the NPRF was transforming into Ireland’s Strategic Investment Fund and it had “largely completed” the recruitment programme to increase its direct investment capabilities. So they’re recruiting …
We’ve changed our minds. It is a (sick) joke.