The securities regulator has approved the registration plan of IDLC Venture Capital Fund, a local venture capital fund.
The local venture capital fund will be registered under the Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015.
In the 699th commission meeting, presided over by its Chairman Dr M Khairul Hossain, the BSEC decided to approve the alternative investment fund intended to invest in promising start-up businesses.
The Fund will last for seven years and its target size is Tk45 crore, according to a press release from the BSEC.
IDLC Finance Ltd, a top non-banking financial institution of the country, is the sponsor of the fund and is providing the initial capital to build the fund.
Its subsidiary IDLC Asset Management Ltd will manage the fund as the mandated fund manager while Green Delta Insurance will act as the trustee of the collective alternative invest scheme.
According to the press release, the private equity fund will focus on investing in early-stage companies from sectors like financial technology, entertainment and lifestyle, enterprise solutions, travel and logistics, core technologies, education technologies, food technologies, agricultural technologies and internet devices.
According to the alternative investment rule, venture capital funds can invest in companies that are no more than 2 years old.
In a later phase, if the young company grows, Private Equity Fund, as the next level alternative investor, invests in the companies.
Ultimately, the private equity investors usually get an exit through stock market listing or by selling their stake to someone else.