Establishing equity fund

Description

Establishing an equity fund involves pooling financial resources from multiple investors to create a dedicated capital base for investing in businesses or projects, typically in exchange for ownership stakes. This strategy aims to mobilize investment, support enterprise growth, and address funding gaps, particularly for underserved sectors or regions. By providing structured access to capital, equity funds help remedy barriers to business development, foster innovation, and promote economic diversification and resilience.

Implementation

The Commonwealth Equity Fund was established in 1990 to enable capital importing developing countries of the Commonwealth improve their access to private institutional portfolio investment on a long-term basis. It is capitalized at around US$ 60 million. The fund operates on a commercial basis with no official financial support. Investment is mainly in countries with established stock markets although up to 30% of capital may be invested in unquoted securities.