NZ Super Fund welcomes introduction of Venture Capital Fund Bill
POSTED ON: 22 August 2019
The NZ Super Fund has welcomed the introduction of the Venture Capital Fund Bill.
The legislation will establish a new Venture Capital Fund, which aims to attract private sector investors to the domestic venture capital (VC) market and help innovative, knowledge‐intensive businesses to grow.
The model proposed by the Government would involve the Guardians of New Zealand Superannuation (Guardians, the Crown entity that manages the $42 billion NZ Super Fund) appointing the New Zealand Venture Investment Fund (NZVIF) to manage a fund of funds. NZVIF will then appoint both domestic and international private sector VC fund managers who will select the companies to invest in.
"Our team have worked with officials on the policy and have had input into the proposed investment structure," says NZ Super Fund CEO Matt Whineray.
"We are comfortable that the investment structure is workable in the context of venture capital investment.
"We note that the bill will be supported by a policy statement which will be finalised after consultation with the VC industry in September."
Under the proposed model, the Guardians would monitor NZVIF’s performance in line with the best practice approach it has developed to manage relationships with other local and international investment managers, as applicable to the New Zealand VC market.
"The Government's decision to appoint the Guardians is a vote of confidence in the Guardians’ commercial expertise and track record. We are working with all parties to ensure the new VC Fund is as successful as possible," says Mr Whineray.
The Guardians will continue to work with Treasury, MBIE (Ministry of Business, Innovation and Employment), and NZVIF to progress the governance frameworks for the new VC Fund.
Legislation is projected to be in place late in the 2019 calendar year.
The Venture Capital Fund is expected to have a life of 15 years, consisting of a five-year investment period and a 10 year "harvest" period, and will receive up to $300 million over five years.