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1- SBP LAUNCHES CIB ONLINE SERVICE
2- KESC GETS RS ONE BILLION FOR IMPROVEMENT
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TMT-PKIC INCUBATION FUND
4-
SECURITIZATION IN PAKISTAN

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TMT-PKIC INCUBATION FUND

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The Rs 250 million Fund has a life of eight years and is mandated to invest in high growth telecommunication, media and technology sectors

 

By SHABBIR H. KAZMI
May 05 - 18, 2003

 

 

The Federal Finance Minister, Shaukat Aziz formally launched TMT-PKIC Incubation Fund on April 26, 2003. It is a venture capital fund jointly raised by TMT Ventures and Pakistan Kuwait Investment Company (PKIC). This is the first SECP-licensed venture capital fund. The Rs 250 million Fund has a life of eight years and is mandated to invest in start up and early stage companies in Pakistan's high growth Telecommunication, Media and Technology (TMT) sectors. The first closing of Rs 250 million Fund was achieved in December 2002. The Fund has already made investments worth Rs 63 million in five companies. The investors in the Fund include Pakistan's leading financial institutions AKD Securities, PKIC, Habib Bank, National Investment Trust (NIT) and SME Bank.

In his key note address, Shaukat Aziz said, "I congratulate the management of TMT-PKIC Incubation Fund for launching Pakistan's first early stage venture capital fund. I am also happy to note that some of the leading financial institutions of Pakistan, particularly the state-owned ones, have participated in this venture. Venture capital in Pakistan has a bright future if done properly. The government is ready to provide an enabling environment. We shall soon witness a booming venture capital industry in the country."

Abdul Rahman Qureshi, Chairman, Securities and Exchange Commission of Pakistan (SECP) ensured full support from the regulators to encourage venture capital in the country. He suggested that the government should extend the tax exemption on venture capital funds and companies to at least ten years from the commencement of business in order to encourage new players. The prevailing tax exemption would expire in 2007.

Earlier, welcoming the guests, Ali Ansari, Chairman TMT Ventures said, "Venture Capital (VC) is all about people. To be successful, a VC has to balance financial discipline with entrepreneurial dynamism. We are here to give the bright, talented and young professionals of Pakistan a chance to prove themselves at a global level. It is not easy money. VC is the most expensive form of financing and to be able to obtain VC financing the entrepreneurs have to accept a rigorous discipline of how to use scare capital. Extreme hard work under tiring conditions is a must if start-ups have to succeed. We have created start-up culture at our incubator 'cyberport'. Every one is welcome to visit us and see how the magic of VC works."

Zaigham Rizvi, Managing Director, PKIC said that real growth of the Information Technology (IT) sector in Pakistan and its contribution to the country's economy could only be achieved once the demand side of the IT related services is accelerated. On supply side Pakistan has a very strong human talent in the IT field. PKIC strongly believes that supporting VC through entities like TMT Ventures is the right step in this direction. Financial institutions globally have played a lead role in initiating venture funds. TMT-PKIC Incubation Fund is the first initiative of PKIC joining hands with AKD Securities and other financial institutions. Rizvi added that strong commitment and support from the GoP and the presence of Shaukat Aziz at the launching ceremony demonstrates that the financial sector is fully committed to playing its role for strengthening IT sector in the country.

TMT Ventures specializes in incubating companies. It manages TMT start-ups and turns them into successful companies. TMT Ventures' unparalleled network of contacts and its active involvement at business strategy level immensely benefit portfolio companies. This starts from providing physical housing, high-speed telecommunication connection, power supply and other facilities at its Cyberport located in Karachi. In addition, TMT Ventures also provides a centralized system of accounts, finance, administration, audit, tax and legal services to portfolio companies, thus taking care of the hassles of doing business in Pakistan. The entire process is automated through an Internet system that ensures transparency and full disclosure, and facilitates corporate governance for the benefit of investors. The companies already benefiting from the TMT Ventures' expertise include 2B Technologies, yEvolve, appxs and Post Amazers.

The success story of TMT Ventures may be incomplete without mentioning Azam Ali, the man who has developed TMT's business model, identified and executed several of its initial investment. He is the key person responsible for creating strategic alliances and exploring international growth opportunities for TMT's portfolio companies. Azam is also the CEO of an oil and gas ventures, a specialist financial advisory and private investment firm focused on this sector. Azam is a graduate from The Wharton School and received his Juris Doctor degree from Columbia University.