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S$1b Singapore fund to help IP-strong businesses go global

Ipos-PE fund is a key addition to IP Hub Master Plan to drive Singapore's growth
Thursday, April 27, 2017 - 05:50

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A new billion-dollar fund has sprung up in Singapore to give companies with strong intellectual property (IP) a leg up so they can commercialise and compete globally.

Singapore

A NEW billion-dollar fund has sprung up in Singapore to give companies with strong intellectual property (IP) a leg up so they can commercialise and compete globally.

The Makara Innovation Fund (MIF), South-east Asia's first private equity investment fund for this purpose, is the result of a partnership between IP ValueLab, the enterprise-engagement arm of the Intellectual Property Office of Singapore (Ipos), and homegrown private equity firm Makara Capital.

The MIF will invest S$30-S$150 million in each of 10 to 15 enterprises for a term of eight years, with an investment rate-of-return target of 12-15 per cent.

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The fund will home in on IP-driven, small- to mid-cap companies internationally and capitalise on cross-border regional expansion.

Makara's managing director Ali Ijaz Ahmad listed five areas of focus for the fund:

  • Urban solutions including logistics and security;
  • Fintech;
  • Alternative energy;
  • Advanced tech such as artificial intelligence and cyber-security; and
  • Healthcare and bio-medicine.

The companies will be selected based on criteria such as having a defensible IP, strong managerial talent and pan-Asian growth potential. They will be able to tap into Ipos's expertise and networks and Makara's commercially-driven approach to turn their innovations into assets and revenue through Singapore.

Mr Ali said: "Since we've been active for the last two years to develop this strategy, we've met a lot of companies in different stages of the due-diligence process... We have a very robust pipeline of companies. We are evaluating them and will start the deployment cycle over the next few months, and then the next couple of years."

The MIF is a key initiative under the updated IP Hub Master Plan, which was announced on Wednesday by Ipos and the Ministry of Law; the plan supports the report by the Committee on the Future Economy (CFE), which identified IP as a key driver of Singapore' economic growth.

Singapore's IP landscape

Indranee Rajah, the senior Minister of State for Law and for Finance, said at a media briefing that the CFE recognises that innovation is pivotal to growing Singapore's economy and that IP is key to protecting innovations and commercialisation.

She noted that, because companies do not fully appreciate what IP can do for them, Ipos takes it as its mission to unlock that potential.

Referring to the tie-up between Ipos and Makara, Ms Indranee said it is "an example of how we're going to move ahead".

"We're not in the business of private equity, but Makara is and Makara will be in a position to approach those start-ups, those businesses, from a private-equity mindset, to suss out the promising ones and do all those things which the government does not have the expertise to do, and really, to adopt that private-sector approach that the government may not necessarily have."

Besides the MIF, two other IP-related initiatives were announced: One was the move to deepen engagement between Ipos and the Singapore Business Federation (SBF) to help enterprises innovate and scale up, and so drive enterprise growth.

To this end, Ipos and the SBF signed a Memorandum of Understanding, under which, among other things, IP awareness and competencies will be built up among the SBF's 24,200 members through seminars and events. These members will also be given direct access to Ipos's suite of services such as training, executive education and IP clinics.

SBF chief Ho Meng Kit said: "I think our unique challenge is how to get the IP that is invested in the public sector - the research institutes and universities - to market... I think that is something we need to work on."

The other initiative announced was the partnership between IP ValueLab and international IP management consultancy firm EverEdge Global Ltd, which will help local businesses unlock their intangible assets such as data, brands, software, confidential information, inventions and designs. To this end, IP ValueLab and EverEdge Global plan to reach out to more than 150 local innovative enterprises over the next three years to provide them with intensive, customised assistance on IP strategy, management and commercialisation.

As part of this drive, a self-help business portal was launched; at www.ipvaluelab.com.sg, innovators and companies can access a repository of IP business guides and toolkits. The plans in the IP Master Plan are estimated to inject at least S$1.5 billion value-add to Singapore's economy over the next five years and at the same time, double the number of skilled IP experts to 1,000.

Ipos's chief executive Daren Tang, described IP as fuel for an innovation-driven economy; he added that with the initiatives, Ipos "will evolve beyond its traditional role as an IP registry and regulator to become an innovation agency". He said Ipos would welcome partners who are not only focused on enterprise growth, but who also understand IP in the way that the government wants to grow the Singapore IP landscape.

To position Singapore as an IP transaction hub, the government moved last month to enhance the design protection regime by introducing amendments to design law in Parliament, among other things. The Registered Designs (Amendment) Bill will soon be read a second time.

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