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Jobs Summit eyes bike track, 'super-charged' retail bond market and co-investment equity fund

Jobs Summit eyes bike track, 'super-charged' retail bond market and co-investment equity fund



Prime Minister John Key has ended the Jobs Summit with a summary of some of the ideas generated that he said government and the private sector would investigate further in the coming weeks. The ideas suggested included: * A 'tourist trail' bike track from Cape Reinga to Bluff that would cost NZ$50 million and create 4,000 jobs for unemployed youth, * The development of a "supercharged retail debt market" to encourage smaller companies, local governments and SOE to raise funds from 'Mum and Dad' investors, thus helping to cope with the Credit Crunch and encouraging savings in vehicles with higher returns than bank accounts.  * The development of a "co-investment equity fund" by the banks and government that would invest equity in businesses needing seed or support capital. What I think I like the bike track idea. I'd pay money to ride it, simply to avoid getting run over by a truck. I'd suggest shutting down the North Island main trunk railway (keep the profitable Auckland-Tauranga-Hamilton milk route), ripping up the tracks and laying a spectacular bike trail through the central North Island.

I like the idea of a much deeper and wider retail debt market that regular investors can access. They key here is liquidity and that will require some banking type market maker to take chunks of this debt onto their balance sheets for short periods and good research teams to improve the information around these issues. ABN Amro will however not be one of these market makers. It decided to pull out of New Zealand today. I'm lukewarm on the idea of a "co-investment equity fund" run by the banks with government co-funding. Nice idea, but I wonder who would use it and whether it would work. A lot of people talk about a lack of venture capital, angel capital and seed capital for businesses in New Zealand. Lots of people try to build and run these funds and fail. Maybe this one would be different. Your views? Fire away in the comments below.

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