Why is it so important that the fund invests alongside private sector investors?
European “State Aid” rules prevent Government funds from being used to give businesses in one member state any financial assistance which gives them a commercial advantage over similar businesses in other member states. Any funding provided must therefore be at fully commercial rates. Because of this the Fund must prove it is investing at fully commercial rates but because there are very few commercial investors operating at this low level there is no established market rate. By insisting that in every case at least half of the funding is provided by an independent private sector investor AT THE SAME PRICE, the Fund can prove that it is investing at a price set by the commercial market. This is why finding a matching private sector investor is such a fundamental part of the way the Fund operates.
Related Questions
- If the private sector helps fund the needs identified in the Campaign, will the state legislature reduce its support of the University accordingly?
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- Why is it so important that the fund invests alongside private sector investors?
