A few weeks ago, the Vice Chair of the Prime Minister’s Task Force on Knowledge Economy asked me to put together a concept note for a fund in which the governments of Pakistan and Qatar can potentially collaborate to support the science and technology sector of Pakistan. This note was put together in a few hours for the Board of Investment as its management attended an investment summit in Qatar. Nothing substantive has come out of it thus far, so I decided to publish it publicly so someone, some where, hopefully in the power corridors of the government, can benefit from it. The concept is loosely based on the very successful Yozma fund model of Israel.

I am just writing the executive summary in this article. For the detailed note, you can view the full PDF version linked at the bottom of the article. Also, since it was a pitch for the Qatari investors, the currency is in US dollars. For a Pakistan based local fund, needless to say that the currency will be Pakisani rupees.

Executive Summary

This concept note highlights an opportunity to create a USD 100 Million Pakistan Innovation Fund (“PIF”) to support and exploit the growing knowledge economy of Pakistan. A large domestic market, increasing level, global playing field for information technology and innovation led businesses and investor friendly policies of the Government of Pakistan present a unique opportunity to create a multi-purpose innovation support fund and take early exposure in the expected innovation-led growth of Pakistani private sector.

The primary design parameters of PIF shall be:

• Investment exposure in seed, early and growth stage knowledge economy businesses in Pakistan that demonstrate high-growth and high-returns potential to maximize returns on investment;
• Investment through multiple capital windows to leverage local and international fund management expertise and Pakistani market knowledge as well as taking direct exposure in very early stage as well as growth stage to optimize management expense;
• Creation of a Pakistan based, Pakistan focused fund based on tax efficient tax structure that fully leverages the incentives provided by Government of Pakistan;
• Ensure best management of the fund by attracting the best talent against market based, performance-tied, incentive structure.

For the full concept note, please download the PDF version from here.