Puerto Rico was always one of the poorest areas of United States. The state, even prior to the hurricane which devastated much of it, was a mess. The recession blighting the state was by then a decade old. The state debt was ballooning. The average income of the state is only half of Mississippi, making it the most disadvantaged state in the US. Unemployment was cripplingly high. However, when many investors and companies saw a waste economic landscape, many saw opportunities. The Community Development Venture Capital (CDVCA) was one of the optimistic financial companies. Kerwin Tesdell, the president of this New York headquartered venture capital company, pointed out that even amongst the devastation, entrepreneurial activity boomed and a number of new funds came up.
The Puerto Rico Fund for Growth presently deals only with Puerto Rican money. The lead investors are the huge insurance funds, including the eponymous car insurance and disability funds. The primary objective of the fund is to invest only in those funds which provide or operate employment within Puerto Rico. The CDVCA, according to Tesdell, is trying to create an exclusive entrepreneurial finance ecosystem in Puerto Rico. The president of the company said that his company is presently on the search for skilled fund managers who are keen to make money in Puerto Rico itself. The candidates must also have an in-depth knowledge of the Puerto Rican economy.
The CDVCA follows a simple strategy. It pioneered what is now known as “impact investing”. The Venture Capital injects funds taken from investors like Goldman Sachs and the Ford Foundation and the sends them to low income communities. The result is the creation of gainful jobs and the boosting of entrepreneurial capacity. Investors in the fund also get their money back with profits. CDVCA presently administers investment capital to the tune of $183 million. For Puerto Rico, the fund has allocated $45 million for exclusive use.
Alexander Borschow is one US returned fund manager. He is a MIT graduate and a Puerto Rican native. With extensive experience in marketing of equity derivatives at his previous employer BNP Paribas and as director of Eataly, the Italian marketplace, he started Semillero Ventures, an agribusiness find in 2016. The latter saw four million dollars investment by the Puerto Rico Fund. Semillero concentrates on agriculture and sustainable food businesses. This will reduce the island's dependency on imports.