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The Catalysing Effect of Public Fund-of-Fund Investments
Jönköping University, Jönköping International Business School, JIBS, Economics, Finance and Statistics.
1992 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

The amount of public money invested in the venture capital industry has increased sub-stantially over the last few decades. The goal is, in general, to facilitate growth in highly in-novative small and medium sized enterprises (SMEs) by securing their supply of capital in early stages. Hence, an important aspect of the effectiveness of public investment is wheth-er it increases the investees’ ability to attract additional funding. The process through which public investments can contribute to a better supply of capital to SMEs by more than just their own investment is commonly known as the catalysing or leverage effect of public in-vestment.

In order to increase understanding of how this effect can be maximized, this study com-pares the amount of capital attracted to Swedish SMEs as a result of public fund-of-fund (FoF) investment to that of direct public investments.

This study shows that:

- FoFs are more effective in increasing the capital supply to SMEs in the market.

- Public investments have a higher catalysing effect on the fund level than on the enterprise level. Hence, EUR 1 invested at the fund level has a larger positive impact for SMEs than EUR 1 invested at the enterprise level.

- The investment quality of private venture capital (VC) investments is generally higher than that of direct public investments. Hence, FoFs allows public inves-tors to "free ride" on the skills of private VCs rather than setting up own struc-tures.

Place, publisher, year, edition, pages
1992. , 49 p.
Keyword [en]
Fund-of-Funds, Public investments, Venture Capital, European Investment Fund
Keyword [sv]
riskkapital, offentliga investeringar, regionala fonder
National Category
Humanities
Identifiers
URN: urn:nbn:se:hj:diva-27436ISRN: JU-IHH-NAA-2-20150039OAI: oai:DiVA.org:hj-27436DiVA: diva2:825731
Subject / course
IHH, Economics
Presentation
(English)
Supervisors
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Masters Thesis
Available from: 2015-07-22 Created: 2015-06-24 Last updated: 2015-07-22Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf