By Durrant Pate/Contributor

Stratus Alternative Fund, managed by NCB Capital Markets, is set to launch its own private equity fund which focuses on providing equity financing to small- and medium-sized entities (SMEs), primarily in Jamaica.

The Stratus SME Private Equity Fund is being launched with the support of the Development Bank of Jamaica (DBJ). This will be the fifth portfolio under the Stratus suite of alternative investment funds, which already includes specialised funds such as its infrastructure- and tourism-focused funds.

The new SME Private Equity Fund will receive J$1 billion in seed capital from the DBJ. It will be seeded with a minimum of J$3 billion, including the J$1 billion from the DBJ.

The fund will have a ten-year life cycle after which the investors’ principal and gains will be returned in accordance with the agreement. This partnership with the DBJ stemmed from a call for proposals for fund managers issued in December 2021.

Fund managers’ submissions were evaluated based on their experience, knowledge of the needs and solutions required by the peculiar SME segment, soundness of strategy and governance structure. 

NCB Capital Markets’ AVP Alternatives & Fund Management, Simone Hudson explained the new fund “represents a win for SMEs in Jamaica, who have a relatively hard time securing financing for their business ventures.”

Stratus to the rescue of SMEs

According to Hudson, “Stratus is here to help them along their journey by not only providing funding but also building out the ecosystem of experts that will aid in the development of the companies and their principals. For investors, it will provide an opportunity to participate in the SMEs’ growth stories at an early stage. Given the successes we have seen on the junior market, there is sufficient evidence that equity investment in SMEs delivers value for investors”.

Hudson views the partnership with the DBJ as a vote of confidence noting that one of NCB Cap Market’s primary objectives in the alternative investments space is to provide tailor-made financing for critical areas of the economy that will boost growth and development. 

For her part, NCB Capital Market’s chief operating officer, Tracy-Ann Spence, stated that the establishment of this fund reaffirms its commitment to innovation in crafting bespoke solutions for its SME stakeholders.

She declared, “The NCB Group continues to increase its avenues of support for SMEs and has built out an infrastructure to support SMEs anywhere along the capital structure. Private equity investment is a key area of focus for NCB Capital Market and, through this vehicle, we will be better able to deepen this type of financing among the SME segment.”