Written question asked by Baroness Burt of Solihull (Liberal Democrat) on Tuesday, 15 December 2009, in the House of Commons. It was due for an answer on Wednesday, 6 January 2010. It was answered by Baroness Winterton of Doncaster (Labour) on Wednesday, 6 January 2010 on behalf of the Department for Business, Innovation and Skills.

Capital for Enterprise

Question: To ask the Minister of State, Department for Business, Innovation and Skills what financial performance objectives have been set for the (a) Capital for Enterprise Fund and (b) UK Innovation Investment Fund.

Answer: The capital for enterprise fund financial performance objective is to make commercial returns commensurate with the instruments used and the risk of the underlying investments. A performance incentive has been created for the manager of the capital for enterprise fund which entitles it to a share of profits once the investors have received a return equivalent to 8 per cent. per annum on their investment in the fund (8 per cent. internal rate of return). This is in line with normal commercial practicesThe UK innovation investment fund is a fund of funds. The target financial return is the average of the performance of the top quartile funds available for investment in the relevant vintage years (2010 and 2011), less the fund-of-funds fees. This measure will provide a target for the funds-of-funds to select and manage funds which have the clear potential to be among the top 25 per cent. of funds in their peer group.

Secondary information