The law of unintended consequences could apply to at least one aspect of the President Obama’s latest bank regulation plan.
Barring banks from investing in private equity funds, which presumably includes venture capital, would be a perhaps fatal blow to a group of funds aimed at creating jobs in low-income areas. These community development venture capital funds count banks as their largest group of investors, said Kerwin Tesdell, president of the Community Development Venture Capital Alliance.
Banks have provided a little over 30% of the capital for the 72 U.S. community development VC funds, which have $2 billion under management. “Right when we’re needed, we’re finding it extremely difficult to raise capital and if this were to go through, it would make it virtually impossible to raise new funds,” Tesdell said.
To read the full, original article click on this link: Bank Rules Could Sink Community Development VC Funds - Venture Capital Dispatch - WSJ
Author: Russell Garland
