Start-ups and innovative small and medium-sized businesses are to be encouraged to stay in Switzerland thanks to a new fund of up to CHF500 million ($499 million).
The initiative, from Swiss Entrepreneurs Foundationexternal link (SwissEF) and launched on Thursday, has the backing of some heavy hitters in the business world, including insurer Mobiliar and banks UBS and Credit Suisse.
Swiss Financial Market Supervisory Authority FINMA approved the Swiss Entrepreneurs Foundation at the end of January, a statement saidexternal link. Its target size is CHF500 million.
It is the first time that UBS and Credit Suisse have been jointly involved in such an investment vehicle, it continued. The two banks are responsible for sales and portfolio management.
Mobiliar is the first anchor investor at CHF100 million. The fund has other targets: institutional investors such as pension funds, high net worth individuals and family firms.
The foundation will provide expertise to growth companies.
The Swiss Entrepreneurs Foundation will invest in Swiss start-ups and innovative growth-stage SMEs that already have products on the market and a client base.
The fund invests directly and through third-party funds in innovative companies with “growth potential”, with the majority of investments made in companies that “have their headquarters or a significant share of their value added in Switzerland”.
“In Switzerland there is a financing gap for innovative growth companies, meaning for SMEs in the phase between start-up and established company. With the Swiss Entrepreneurs Foundation we are closing this gap,” said Lukas Gähwiler, chairman of UBS Switzerland.
A main concern is also keeping young Swiss companies in the country. “Start-ups are an important pillar of Switzerland’s successful model. Young companies should be founded and developed here in Switzerland, the added value and the new jobs should stay here,” said Johann Schneider-Ammann, the former economics minister and driving force behind the Swiss Entrepreneurs Foundation.
The foundation was launched in December 2017, while Schneider-Ammann was still in the Federal Council. He is still the foundation’s honorary president; its patron is now the current economics minister, Guy Parmelin.
Talking about the need for the foundation when the idea was mooted in summer 2017, Schneider-Ammann said it was important to stop young entrepreneurs moving to the United States over a lack of venture capital. A change of mentality – including an acceptance of business failure – was also needed, he said.