Wall Street investment bank Merrill Lynch has launched an 'Internal Venture Capital Fund', in a bid to invest in and grow technology companies conceived by company employees.
The venture will fund and support business plans created by employees that propose fundamental technology shifts in the financial services industry, says Merrill, including knowledge management, mobile technologies, e-finance infrastructure and communications.
According to the bank, the initiative is also a means to attract and retain top-quality employees by encouraging top staff to "drive the technological development of Merrill Lynch, shape the future of financial markets and personally benefit from their ideas through direct ownership".
To help in the development of these new businesses the firm has assembled a network of select catalyst firms, including Cap Gemini Ernst & Young, efinanceworks and Startupfactory. The fund will be coordinated with and supported by Merrill Lynch's global private equity-activities representing more than $1 billion in committed capital.
The bank says it will back its investment in home-grown output with the possibility of becoming the first client or strategic partner for new venture products. In the first phase of the programme, the fund anticipates seeding three to four new companies by early next year.
Alvi Abuaf, vice president and founder of the centre for enterprise creation at Cap Gemini Ernst & Young, comments: "We see a trend of global corporations increasingly tapping their internal assets - brand, customer base, intellectual capital - to create new enterprises together with external catalysts."