The U.S. government is investing about $200 million in overseas venture capital funds


According to a recent article in reCode, The U.S. government plans to spend hundreds of millions of dollars in venture capital funds overseas as part of an expanded federal program to do good around the world through what’s known as “impact investing.”

Chart from OPIC – Number of Projects in Nov 2017: 668

The program, unveiled Wednesday at a conference by the Overseas Private Investment Corporation, will dedicate around $200 million over the next few years in 10 to 15 venture funds that focus primarily on making a social impact in overseas countries. The exact amount of money allocated could change, but is expected to be in the hundreds of millions of dollars.

OPIC will effectively serve as a limited partner in venture funds, much like it has in private equity — where it has spent $4.1 billion over the last 30 years.

OPIC’s expansion into venture capital comes during an administration that has tried to cut back on foreign aid. Trump’s initial budget blueprint, in fact, called for OPIC to be wound down and eliminated.

But OPIC’s David Bohigian told Recode in an interview that he had broad support from the highest levels of the current administration. OPIC, unlike sovereign wealth funds, is not primarily concerned with making money.

OPIC will look to invest in funds in places like Africa, Southeast Asia and the Middle East.

So, what is OPIC?

The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances U.S. foreign policy and national security priorities. OPIC helps American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at home and abroad. OPIC fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity investment fund managers.

Other references:

Leave a Reply