MINISTER FOR Enterprise, Trade and Innovation, Batt O’Keeffe, yesterday launched a call for expressions of interest from international investors to be involved with Innovation Fund Ireland. The fund will be backed with €250 million in State money.

It is hoped the €125 million contributions from both the National Pension Reserve Fund and Enterprise Ireland will attract international venture capital firms to establish their European headquarters in Ireland.

The pension reserve fund will invest on purely commercial terms and the funds it co-invests with will be free to put that money into companies across Europe. The pension reserve fund already invests in a number of Irish and international private equity funds and according to its 2009 annual report, has investments in four Irish venture capital funds.

Given its public policy remit, Enterprise Ireland will attach conditions to its investment that the money is used to back Irish companies or companies that create employment here.

“If this is successful it will create a number of large Irish headquartered businesses who are employing significant numbers here and making profits here,” said Damian Callaghan of Intel Capital, who is chairman of the fund’s advisory board. “This is not the only thing being done to help entrepreneurs but it is a key thing.”

The establishment of the innovation was a key recommendation of the Innovation Taskforce which reported in March on how 117,000 jobs could be created by 2020.

Representatives of the pension reserve fund and Enterprise Ireland have been meeting international investors about the fund since the beginning of the year.

Yesterday, representatives of both organisations said those discussions gave them the confidence to make an open call for expressions of interest. It is expected this will be the first of three such calls over the fund’s five-year lifespan.

Although the primary focus had been on attracting US venture capital, investors in London and Israel have also been briefed on the process.

Mr Callaghan dismissed criticism of the recommendations of the taskforce, in particular those of Colm McCarthy, who said it was “vague” and too “aspirational”.

“There’s been a lot of commentary from people who have never engaged in building companies,” said Mr Callaghan. “I’ve never had a meeting with entrepreneurs where at the end of it they said we really need two academic economists to build this company.”