Venture Capital Fund
In the May 2019 Budget, the Government announced it would give the Guardians a second fund-–a venture capital fund--to manage alongside the NZ Superannuation Fund.
The Venture Capital Fund is a Government initiative aimed at growing more innovative industries in New Zealand and lifting productivity. It aims to attract private sector investors to the domestic venture capital market to grow innovative, knowledge‐intensive businesses. This is an important step towards future‐proofing the New Zealand economy in a time of rapid technological change.
The new Venture Capital Fund will support Series A and B investments into companies that have moved beyond the start-up, or "angel" investor stage, and need capital for further development. The Government believes that there is a gap in these early stage capital markets in New Zealand, leading to many innovative young companies heading offshore. The fund will support early stage companies, help develop the early stage capital ecosystem in New Zealand and, by doing this, support innovation in the economy. The 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 four years.
The Government tasked the Guardians with overall responsibility for the new fund because of our experience as an institutional investor and reputation for best-practice management. The Venture Capital Fund is a fund-of-funds programme and will be managed on behalf of the Guardians by the NZ Venture Investment Fund.
Since the Budget announcement, the Guardians has been working with Government on the development of the legislation required to establish the fund and a supporting policy statement, which includes definitions of key terms and investment requirements. The Venture Capital Fund Act was passed in December 2019 and the policy statement was released on 19 December 2019. The fund will be launched in early 2020. More information about the fund and the investment process can be found on the NZVIF website. A statement released in July 2019 has more with background and question and answers about the programme.