The chairman of the Irish Venture Capital Association has called on Irish pension funds to invest in high potential indigenous technology firms. Speaking at the IVCA’s annual dinner in Dublin, Mark Horgan said a 2% investment in tech firms via venture capital funds would represent an injection of €500 million into the sector.
Horgan (pictured), who is a partner in growth equity fund Atlantic Bridge, said an investment of €500 million would enable Irish entrepreneurs build their companies over a longer period and so increase valuation for investors. He also pointed out that US tier one multinationals have billions of dollars offshore which they are unable to repatriate without incurring tax liabilities.
"Rather than growing organically they are using these funds to purchase niche technology companies especially across mobile, cloud, digital and life sciences to fill the gaps in their product and service offering. The process is called ‘search & development’ rather than ‘research & development’ – pushing up exit prices and thereby generating greater returns for investors," said Horgan.
He said that Irish venture capital firms are currently collaborating with Enterprise Ireland and the National Pensions Reserve Fund to build local VC funds. "This investment will also attract tier one international VCs to syndicate with local VC partners thereby providing further investment for Irish companies so that they can scale globally."
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