BUDGET: $300m for new fund

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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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