‘Road ahead must be different to the one behind us’ – Finance Minister Clyde Caruana

Minister for Finance Clyde Caruana believes private equity and venture capital are “crucial pillars” necessary for the development of Malta’s future economy.

Speaking at the signing of an MoU between the Private Equity and Venture Capital Association (PEVCA) Malta and Invest Europe, the world’s largest association representing the private equity and venture capital industries, the Minister for Finance told the audience of senior figures in Malta’s financial services industry that “the road ahead must be different to the one behind us.”

“We need more capital, more tech, more productivity,” he said, repeating an favoured talking point linking economic transformation to growing calls for quality of life measures.

Private equity and venture capital, argued Minister Caruana, are vital in securing the funding needed to fuel innovation.

“The sector must provide innovative startups and scale-ups with the capital they need to grow,” he said.

Hosted at the Hilton Malta, the signing of the MoU included PEVCA Malta’s honorary membership in Invest Europe, strengthening the country’s engagement with the European private capital community.

PEVCA Malta Chairman Martin Galea described Malta’s efforts to increase interest in private equity and venture capital as a move of “strategic importance that can deliver critical benefits” to its economic development.

He encouraged those in attendance to be ambitious, saying: “We have the foundations. We just need the focus.”

A note of caution came from John McIlwaine, Senior Regional Representative for Italy and Malta at the European Investment Fund, who stressed that the benefits of private equity and venture capital investment can take years to accrue.

He pointed out that while Germany started its PE/VC journey, with the assistance of the EIF, in the early 2000s, it only started booming in the mid-to-late 2010s.

“This is a journey that takes time,” he told the audience. “But you will have breakthroughs.”

Since Malta is still in the early stages of fostering an environment conducive to private equity and venture capital investment, Mr McIlwaine continued, “it will have to play catch-up.”

“The question, then, is how Malta can leapfrog ahead,” he said, arguing that the launch of the ‘28th’ regime, set to be announced in the first quarter of 2026, will present an opportunity for the country to overcome the limitations of its small market by attracting capital from all over.

The “28th Regime” is a proposed optional EU-wide legal framework that would sit alongside the existing laws of the 27 member states. It would offer companies, particularly startups and scale-ups, a single, harmonised set of rules to operate more easily and competitively across the single market.

Martin Bresson, Public Affairs Director at Invest Europe, noted that the Europe has no lack of capital to invest – but its allocation remains a problem.

“Too much money is held in passive bank accounts or pension schemes that don’t invest in alternative assets,” he said, arguing that private equity and venture capital are required to breathe new life into the European economy.

FinanceMalta Chairman George Vella said he firmly believes that the private equity and venture capital sectors represent the “missing links” in Malta’s financial services offering, with strong potential to enhance the broader ecosystem.

Joseph Zammit Tabona, Chairman of the Malta Financial Services Advisory Council, added that PEVCA Malta’s entry into Invest Europe sends a strong signal to the international community.

“Becoming a member of the largest private equity association shows that Malta’s market is maturing. Attracting these sectors is instrumental not only in supporting existing segments of our financial services landscape but also in enabling new ones to flourish,” he said.