A private fund set up to make “significant investments“ in Bermuda’s infrastructure has stopped funding new projects, it has been confirmed.

The Bermuda Infrastructure Fund was set up at the end of 2017 by a consortium of reinsurance companies in partnership with the Government.

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David Burt statement on the BIF from November 2017.pdf

But questions about its future were raised last month after a second round of funding for one recipient — the telecommunications company Horizon — was unexpectedly withdrawn, forcing it into receivership.

A spokesman for the Ministry of Finance said the investment period ended last year, adding: “The fund has continued to provide support to projects in which it had previously invested, where appropriate.

When David Burt, the Premier and Minister of Finance, announced the launch of the fund in November 2017, he said that it hoped to raise a minimum of $100 million in commitments from Bermudian-based insurance companies.

He added that the Government would guarantee a fee of $1 million per year to Fortress Investment Group, the fund’s New York-based management company.

Yesterday the spokesman said that the Government had “invested” $3 million into the fund, but did not clarify if these payments were for management fees.

The spokesman said: “In this venture, the Government invested approximately $3 million into the fund, which was established to provide funding for projects that met the fund objectives. However, that investment period ended in 2022.

“The Government provided tangible support to this fund as it was seen as a vehicle to expand the range of options within Bermuda for advancing local projects.

“When the fund closes in the future, monies will be returned to investors, including the Government, from the proceeds of the investments, less fees charged by the investment managers and other costs.”

Mr Burt had also previously stated that funding could be funnelled towards projects such as upgrading port facilities, sewage treatment plants and energy infrastructure.

He said: “The purpose of this plan is to identify important improvements and repairs to Bermuda’s infrastructure that will not only enhance the overall quality of life but will also create business opportunities for construction companies and jobs for Bermudian construction workers.”

However, yesterday the spokesman said that the fund was also intended to support local businesses.

They said: “The fund was also a way to partner with entities in the private sector to assist Bermudian entrepreneurs in achieving their dreams in a way that would also provide positive benefits for the island.

“Private equity funds are recognised to be an essential source of capital for start-up ventures, in particular. However, it is well recognised that depending on the nature of the business and the various economic and financial factors, start-ups will have varying levels of success.”

The Royal Gazette understands that funding was provided to minicar rental company Rugged Rentals in addition to Horizons, but it is not known if the fund has invested in any infrastructure projects in the past five years. The Government has not responded to repeated requests from this newspaper for an itemised list of projects and their value.

Mr Burt did hit back at calls by Craig Cannonier, of the opposition One Bermuda Alliance, this week for the Government to provide an update on the fund.

Mr Burt said: “The OBA need to figure out who they are. Are they the Opposition who in the House of Assembly continually say that we must work together for the benefit of Bermuda, or the Opposition who hurls baseless and false accusations that are reprinted in local media?

“MP Cannonier has my phone number and can send me a message if he has any questions. The Bermuda Infrastructure Fund is a professionally managed investment fund, with 96 per cent of the funds coming from Bermuda’s successful and growing international business sector. It is a partnership that should be applauded, not derided by the former premier, who has little to no credibility.

“Today, the Chamber of Commerce reported that two thirds of Bermuda’s businesses have confidence in their economic future in Bermuda.

“In 2021 Bermuda’s international business sector grew at its fastest pace in 15 years, faster than it did under any of the time under the former OBA government.

“More Bermudians than ever are working in Bermuda’s thriving international business sector. I applaud the companies who put up funds to support local infrastructure projects, and I hope that the Leader of the Opposition can get his party to do the same.”

Business executives first approached the Government with a proposal for the fund when the OBA was in office in 2017, but were turned down over a refusal to use taxpayer revenue to pay management fees.