NORTHERN BUSINESS: The University of Ulster has set up a venture capital fund to focus exclusively on university spin-out firms. Known as the Alpha Fund, it aims to encourage graduates and academics to set up high-tech businesses, particularly in the biotechnology sector.
Prof John Hughes, pro-vice chancellor of research and development, spent last week in the US drumming up support for the $15-$25 million (€17-€28.5 million) fund. It will be operated independently but will be dedicated to start-ups arising from research at the University of Ulster.
The establishment of such a dedicated fund was unique in the UK, said Mr Hughes, adding it was necessary to combat a shortage of funding for entrepreneurs seeking significant start-up capital in Northern Ireland.
"We are spinning out some potentially very lucrative firms, especially in biotechnology where the university has an international reputation of expertise," he said.
Mr Hughes was accompanied by Mr Chris Barnett, the university's director for science and technology, and Mr Robin Horner, director of IBI Corporate Finance in Belfast. They met potential investors in Boston, Pittsburgh and New York. The university has also sought venture funds from other parts of the world, including Asia. Following the dot.com crash, venture capital firms in the US have become selective about where they invest. But "there's still a lot of money out there looking for a home", said Mr Horner.
Recent market research shows that biotechnology, neglected in the late 1990s, has become one of the "hottest" areas for investment. A survey by US market research firm VentureOne identified up to $50 billion in venture capital that has been raised in the US but not yet invested.
Overall, venture financing has nevertheless become progressively harder to find in the past two years. Venture capital investments in the US fell from 1,711, worth $27 billion, in the first quarter of 2000, to 610, worth $6 billion, in the last quarter of 2001.
The University of Ulster has already set up a separate firm, the Ulster Science Parks, which provides incubation facilities and research and development links to the university for new start-ups on three campus sites in the North.
A £14.5 million sterling (€23.6 million) facility at the university was established recently to conduct leading-edge research into cancer, diabetes and heart disease.
The Centre for Molecular Biosciences at the Coleraine campus will open in 2003.
