Urban Development Funds

An Urban Development Fund (UDF) is a fund investing in public-private partnerships and other projects included in an integrated plan for sustainable urban development. To be eligible for JESSICA funding, the UDF will need to demonstrate, amongst other things:

  • sufficient competence and independence of management
  • a comprehensive business plan and budgets for undertaking qualifying projects
  • sound financial backing.

A UDF can be a separate legal entity, or be established as a “separate block of finance” within an existing financial institution. In such cases, JESSICA funds need to be separately accounted for and clearly segregated from the other assets of that financial institution.

UDFs can be established at either a national, regional or local/city level in response to integrated urban development plans, project pipelines and investor interests.

Risk Investment Funds

When it comes to risk, here’s a reality check: All investments carry some degree of risk. Stocks, bonds, mutual funds and exchange-traded funds can lose value, even all their value, if market conditions sour. Even conservative, insured investments, such as certificates of deposit (CDs) issued by a bank or credit union, come with inflation risk. They may not earn enough over time to keep pace with the increasing cost of living.

What Is Risk?

When you invest, you make choices about what to do with your financial assets. Risk is any uncertainty with respect to your investments that has the potential to negatively affect your financial welfare.

For example, your investment value might rise or fall because of market conditions (market risk). Corporate decisions, such as whether to expand into a new area of business or merge with another company, can affect the value of your investments (business risk). If you own an international investment, events within that country can affect your investment (political risk and currency risk, to name two).

There are other types of risk. How easy or hard it is to cash out of an investment when you need to is called liquidity risk. Another risk factor is tied to how many or how few investments you hold. Generally speaking, the more financial eggs you have in one basket, say all your money in a single stock, the greater risk you take (concentration risk).

In short, risk is the possibility that a negative financial outcome that matters to you might occur.

SPV (Special Purpose Vehicles)

A special purpose entity (SPE), more often called a special purpose vehicle (SPV), is created to carry out a specific business purpose or activity. SPVs are frequently used in structured finance transactions, such as in asset securitizations, joint ventures, or to isolate certain company assets or operations. SPVs can be created through a variety of entities, such as trusts, corporations, limited partnerships, and limited liability corporations.

SPVs are used by many companies for an array of financing purposes. They are, and should continue to be, an integral part of most structured finance transactions.

Business Accelerators and Incubators

Business incubators and business accelerators provide advice, guidance and various forms of support for businesses in the startup phase. The key difference between them is that business accelerators, as the name suggests, compress the timescale for starting up by operating as a type of boot camp.