BUDGET: $300m for new fund

Contributions to NZ Super Fund siphoned off to new start-up fund.

Thursday, May 30th 2019, 2:24PM 2 Comments

In this year’s Budget $300 million is being invested over four years into a new fund to provide funding for early capital markets.

This fund will be administered by the Guardians of NZ Superannuation. Of the $300 million, $240 million is will come from NZ Super Fund contributions and the other $60 million will come from the NZ Venture Investment Fund.

“The Government is prioritising responsible investments that enhance the long-term wellbeing of New Zealanders.”“This will help keep more start-ups in New Zealand for longer and support the proportion of New Zealand ownership,” Economic Development Minister David Parker said.

He said the fund would draw on the NZ Super Fund Guardians’ advice for “a best practice commercial approach to support the NZ VIF in making venture capital investments to take start-up businesses to the next level.”

Mid-sized companies in the $2 million to $15 million annual turnover range were not well supported by New Zealand’s capital markets, although start-ups were able to get funding.

“Filling that gap will help reduce pressure on companies to sell prematurely to overseas buyers, which happens when you have weak early-stage capital markets,” Parker said.

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Comments from our readers

On 30 May 2019 at 8:42 pm Graeme33 said:

...surely this is the job of NZX..these turnover figures surely indicate a good business ,worthy of investigation.NZX,i feel,are lacking any imagination..and probably other things also.my opinion.Graeme Adams

On 5 June 2019 at 11:07 am Pragmatic said:

I agree with @Graeme33. Whilst NZ Super will no doubt make this a success, it raises some serious questions about the ability of the NZX - who should be a natural choice for this type of initiative. Perhaps if the NZX focused on their core business, then the markets & participants would have renewed confidence in their ability to be effective with these programs.

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