State development agency Enterprise Ireland has said it will provide support to banks and other financial advisers whose clients wish to diversify their portfolio by investing in Irish start-up firms.

Kevin Sherry, head of Enterprise Ireland's high potential start-up unit, said banks and corporate finance houses will have a key role to play in the success of the expanded Business Expansion Scheme (BES).

"We are seeing increased interest from private investors, because of the new rules, but largely because they are interested in diversifying their portfolio from all-property," said Mr Sherry. "The advisers and the banks have an important role to play both in terms of co-ordination and in terms of providing advice on where best to invest."

Minister for Finance Brian Cowen announced in the last Budget that the limits per company for the BES would be raised to €2 million and to €150,000 for individuals investing in the schemes. The Government is awaiting EU approval for the changes.

Mr Sherry said the funding environment for start-ups was good and he was confident that the major Irish venture capital firms, currently raising new funds, will be able to start investing substantially by mid-year.

Enterprise Ireland chief executive Frank Ryan said that, following the decision of the National Treasury Management Agency to invest in venture capital funds, he hoped Irish pension funds "would reassess the opportunities" in this area.