The chief executive of Cyprus’ largest pension fund has expressed concerns about a new state investment fund planned for launch by the government with an initial capital of €20m.

The fund is aimed at boosting the economy by supporting start-ups and business innovation, but Marinos Gialeli, chief executive of the €222m Cyprus Hotel Employees Provident Fund, has highlighted the need for greater protections for small investors.

Gialeli told IPE: “We are a little bit concerned about the minority shareholders rights in Cyprus, plus that the court legal decision can take many years.

“In addition, we would like to see the selection of the manager being done through global professional consultants via a public offering and not from the Cyprus Ministry of Finance.”

Gialeli said his pension fund had no intention of investing in the government fund. This is because the majority of Cyprus Hotel’s portfolio is invested internationally, and mostly focuses on private equity.

Local news service Stockwatch reported that Cyprus’ cabinet decided on the launch of the investment fund on Wednesday.

Government spokesman Prodromos Prodromou said the aim of the fund was to foster business innovation and creativity, adding that it would provide an alternative funding source to the banking sector, according to the report.

Prodromou said the state would not participate in the decision making of the fund, which would operate purely in accordance with business standards.