The Swiss government has recently signed an agreement for handing over the management of the Swiss Technology Venture Capital Fund to a private sector Swiss company based in Zurich. An agreement to this effect was signed here last week.
The fund will now be headquartered in Zurich. However, in order to maintain continuity in the functioning of the fund, the advisory section of the fund will be retain its current composition. "All the people working as advisors in the current company, will be shifted to the new company," said officials from the Swiss State Secretariat for Economic Affairs (SECO) here on Monday.
Currently, Alliance Venture Capital Advisors (AVCA) act as advisors to the fund in India and make recommendations for the selection of companies for investment. They also provide pro active support to the invested companies right from the stage of business plan preparation, structuring the financial package and in identifying Swiss partners in case of deserving cases through its strategic partner in Switzerland.
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The new company will also help market the fund to private sector companies in Switzerland, officials added. "The governments objective was to start the fund, establish a demonstration effect and then move out, allowing private parties including banks, insurance companies and even Indian investors who may be interested, to jump in," she added.
Once this happens, the corpus of the fund could also be increased. Currently, the fund has a corpus of $18 million, of which $12 million has already been invested in India.
The fund was set up in order to encourage small and medium-sized Swiss firms to enter into long term collaborations with Indian partners and to promote the transfer of new technologies.
SECO sponsored the fund which is based in Mauritius. The objective was to achieve significant medium to long term capital appreciation through investments in equity and quasi equity instruments. The fund normally considers only projects with Swiss linkages, such as joint ventures, technology tie-ups, capital goods or raw material imports from Switzerland or export of products to Swiss companies. It normally invests in unlisted companies. It has invested in companies in the areas of food processing, textiles and chemicals.