Government co-financed "Hybrid" Venture Capital Programmes (3)

Capped return for public investors (CORFU)

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CL Chile
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Concept

About the project Edit

The Corfu Fund in Chile is based on the following framework: after all the investors (including the public investor) have received a certain rate of return (IRR), the rest of the cash flows are distributed to private investors only.

In what ways is this project unique and creative? Edit

Capped return for the government increases the expected rate of return (IRR) for private investors. This distribution increases the compensation for good performance. This in turn creates a strong incentive for the private investors to incentivise the General Partners (management team of the Fund) to make succesful investments and add value to portfolio companies.

What is the social value of this project? Edit

By limiting the profits entitlement of the public investor, this hybrid scheme allows to attract private investors and create a dual return system.

What is the potential of this project to expand and develop? Edit

Like the Israelian Yozma program, the Chilean program provides a subsidy to fund investors through capping its return on investment. It is clearly inspired from the US VC fund management system.

What was the triggering factor of this project? Edit

What is the business model of this project? Edit


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