New investment fund for Luxembourg businesses

(CS) The new Luxembourg Future Fund will support local businesses with a 120 million venture capital fund, financed through dividend payouts from BGL BNP Paribas.

In a bid to increase economic diversification in the Grand Duchy, the fund will allow direct investment in enterprises or fund of funds (FoFs).

Luc Frieden said at the presentation of the project that the government was now “harvesting the fruit” of the support for BGL BNP Paribas in 2008, with 140 million euros taken back over the past two years.

Via the Société nationale de crédit et d'investissement (SNCI) the state will hold the largest share of the funds. Additional support will come from the European Investment Bank (EIB) and the European Investment Fund (EIF), which will invest 30 million euros.

The EIF will also manage the fund, as it has a lot of experience with such projects, said economy minister Jeannot Krecké at the press conference.

The fund will have a planned duration of 15 years with the possibility to add two further years, and is meant to be ready by the end of the first quarter this year, according to Krecké. Further investments from the BGL are not intended, highlighted Frieden. The fund is also seen as a way to attract new investors, while the SNCI is meant to keep the majority at all times.

While there is an inevitable risk, Frieden was confident that this risk was controlled and limited. “If we don't take risks, we'll never achieve anything,” he said.

Additionally, as part of the diversification scheme some 25 million euros will be made available for a special bio-tech fund via the SNCI, for more growth in the health sciences sector. This investment, however, will not just involve Luxembourg project, unlike the Future Fund.