Further delay in the operation of the Investment Fund for the Provision of Capital Financing (Equity Fund) is expected due to the appeal of interested parties to the Bid Review Authority for the tender of the Ministry of Finance, regarding the selection of the fund manager. For the operation of the Fund, there were relevant credits in last year's budget and the goal was to set it up in 2020, however, the relevant competition for the selection of an administrator was announced only in May and due to the appeals, it continues with obstacles.
Two companies dealing with the subject, GMM Global Money Managers Ltd and Fiduserve Asset Management Ltd, appealed to the Tender Review Authority (TSO) for interim measures, succeeding in the freezing of the relevant tender announced by the Ministry of Finance – Tender for the appointment of a Fund Manager for the establishment and management of a Regulated Alternative Investment Fund (RAIF).
In particular, in its decisions of 25 and 27 November 2020, the Tender Review Authority approved the granting of interim measures to suspend the award or execution of an act or decision of the Contracting Authority or the signing of the contract relating to the relevant tender, until issuance of a final decision of the Tender Review Authority on the appeals. As stated in the decisions of the AAP, the granting of interim measures was decided on the basis of what is mentioned in the appeals and taking into account that the Contracting Authority (s.s. the Ministry of Finance) has not objected to the granting of interim measures. However, according to the information of “F”, developments in relation to the appeal of two companies are expected around the middle of February where the Authority is expected to meet examining the substance of the appeals.
Financing tool
As mentioned, the Ministry of Finance announced on May 4, 2020 the competition for the selection of the Fund Manager, which, as mentioned in a relevant announcement, will undertake the establishment and management of the Investment Fund for the Provision of Equity Funding (Equity). Fund). The creation of the Investment Fund was approved by the Council of Ministers in August 2019, with the aim of improving access to finance for small and medium-sized enterprises, especially start-ups and innovators.
The state, based on the decision of the Minister, is expected to contribute up to € 20 million to the Investment Fund that will operate. Both the 2020 budget and the 2021 budget, which were rejected, included provisions of EUR 5 million for the operation of the fund. As stated in the May announcement of the tender, the fund's investment strategy, which will be proposed by the Administrator and approved by the government, will ensure the achievement of the government's objectives. The goal, in addition, is priority investments in start-ups, investments that promote innovation, technological upgrading, export orientation / internationalization of companies and integration into domestic and external value chains / cluster development, as well as the development of new sectors, without excluding any other viable investments in existing productive sectors.
It was also clarified that the Fund Manager, who will be licensed by the Cyprus Hellenic Capital Market Commission or a corresponding supervisory authority of the European Union, will be responsible for the implementation of the investment strategy and for the investment decisions, in cooperation with its Investment Committee. Fund, which will be composed of experts in the field of recognized prestige and with specialized knowledge in investment funds. It is worth noting that the creation of an investment fund (equity fund) to finance companies in Cyprus was one of the first suggestions of the Cyprus Economy and Competitiveness Council, which submitted a proposal in this direction. It is also noted that the recommendation by the government of the Fund's Investment Committee seems to be pending, which will have a supervisory role and will consist of experts in the field and with specialized knowledge in investment funds.
