A private company has entered into partnership with AIB to provide a venture capital fund totalling £12 million. It will provide equity of up to £1 million to expanding companies. The investment company, Frank Reihill & Co, will provide £2 million and will manage the total fund. AIB will provide £4 million and the remaining £6 million will be put up by the EU's European Regional Development Fund (ERDF), administered by the fund's third partner, the State agency, Forbairt.

The Trinity Venture Fund is aimed at smaller companies which have had limited venture capital opportunities within existing funds. Mr Gerry Moloney, investment manager of Forbairt, said the fund's existence narrowed the equity market gap, with which the State had to concern itself. Mr Walter Coakley, the general manager of AIB's Strategic Development Unit, said a "chicken and egg" situation had existed for small and medium-sized companies, where the absence of risk capital averaging between £250,000 and £300,000 had precluded expansion opportunities.

Mr Shane Reihill, the co-chief executive of Tedcastle Holdings, is the chairman of the fund. He said that companies with good management teams and growth potential would be beneficiaries of the fund, the largest in Ireland under the ERSF scheme. Mr David Gavagan, the chief executive of Hibernia Capital Partners, is the non-executive chairman of the Trinity Fund's investment committee. Hibernia Capital is a recently established £26 million fund aimed at investments of between £1 million and £10 million.

Mr Coakley said that, while the two funds were separate, there could be opportunities for appropriate companies to tap into both.