Aug. 4–One Asset Management, which oversees the SME Venture Capital Fund, expects to lend 500 million baht to small and medium-sized businesses this year.

Lending through the fund will stop at the end of the year. Senior vice-president Karsaemsun Na Ayudthya said the fund would hold another 200 million baht for re-investment.

One Asset was appointed three years ago by the Finance Ministry to oversee the one-billion-baht venture capital fund. The fund has taken share stakes in a number of small firms, with the objective to exit from each investment within ten years through a listing on the Market for Alternative Investment.

Operations by the fund have been relatively slow, in part due to restrictions imposed by the fund as well as general market weaknesses in small business accounting, management and business planning systems.

Mr Karsaemsun said declining interest rates has also led many small businesses to turn to bank loans to raise capital instead of from the equity markets.

He expressed confidence that the fund could meet its investment target, with One Asset joining hands with the Stock Exchange of Thailand and the Industry Ministry to help identify potential opportunities.

Mr Karsaemsun said the fund is required to invest from 10-50 percent of its capital in small businesses, with an investment period of three to five years.

Most investments are made passively, with the fund playing no role in business operations. The fund does nominate a director to the boards of each company it invests in.

Mr Karsaemsun said the fund expected to exit its investments from the 25 companies already held by the fund, either through a public offering, share sale to the company founders or possibly a sale to strategic partners.

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(c) 2003, Bangkok Post, Thailand. Distributed by Knight Ridder/Tribune Business News.