A new source of public funding for business development – let’s call it another trough, folks – was officially launched in Auckland yesterday.
According to a report in Deal Street Asia, Associate Finance Minister David Parker announced the launch of the Elevate NZ Venture Fund in Auckland in a Twitter post.
Maybe he did. But fair to say the Point of Order Trough Monitor was triggered when a heads-up was emailed to news media on Tuesday to advise of the launch.
Finance Minister Grant Robertson, Economic Development Minister Phil Twyford and David Parker followed up with a joint press statement emailed to journalists, one of two statements on the launch posted on the Scoop website around 11am yesterday.
The first statement was headed Elevate NZ Venture Fund To Lift Productivity.
The Government’s new $300 million venture capital fund – announced in last year’s Budget – is now open for business as the Elevate NZ Venture Fund.
Associate Finance Minister David Parker said the fund will be managed by the New Zealand Growth Capital Partners (formerly New Zealand Venture Investment Fund), on behalf of the Guardians of the New Zealand Superannuation Fund (the Guardians), who will oversee and monitor the performance of Elevate NZ.
And –
Phil Twyford says the new funds will increase Series A and B investments generally in the range of $1m to $10m needed by these expanding companies to grow. The investments are expected to be made into New Zealand businesses over the next 10 to 15 years.
A few minutes later the New Zealand First Party got in on the act (hey, don’t forget about us) with a statement headed New Zealand First Celebrates Launch Of $300 Million Venture Capital Fund –
“It is incredibly good news that the much anticipated $300 million venture capital fund announced in last year’s budget is now open for business,” says Deputy Leader for New Zealand First and Spokesperson for Finance and Revenue, Fletcher Tabuteau.
“There has long been a gap in investment funding in New Zealand, something New Zealand First had identified for some time,” Fletcher Tabuteau said.
“This coalition Government listened to businesses and experts, and now we finally have a fund that enables targeted support to assist New Zealand firms that expand beyond the early start-up phase, something the previous Government knew was a problem but did nothing about.
“We can now really make the most of commercial opportunities on the global stage and alleviate the pressure on Kiwi companies selling prematurely to overseas buyers. This will mean more kiwi big businesses and better paying jobs for New Zealanders.
The Beehive website was not bypassed for the launch. The Robertson-Twyford-Parker statement was posted there today. It is one of several which record the fund’s development.
The fund was one of many initiatives announced in the Well-being Budget last May and has been mentioned in a few subsequent Beehive press statements –
30 MAY 2019
There is evidence of a gap in domestic capital markets, which may be slowing the growth of New Zealand firms – this gap is not being filled by foreign venture capital. The Government has therefore asked the managers of one of New Zealand’s sovereign wealth funds to support its goal to strengthen and deepen this market.
A new $300 million fund will be set up, to help fill this ‘capital gap’ for New Zealand firms that expand beyond the early start-up phase.
Economic Development Minister David Parker says the fund will help keep more start-ups in New Zealand for longer and support the proportion of New Zealand ownership.
The $300 million fund will utilise a portion of contributions ($240 million) earmarked for the New Zealand Superannuation Fund between 2018 and 2022 and $60 million from the New Zealand Venture Investment Fund’s (NZVIF) existing assets.
The new fund will be administered by the Guardians of the Superannuation Fund, and invested by NZVIF through private sector fund managers.
27 AUGUST 2019
Law to boost venture capital investment passes first reading
The Bill setting up a $300m Venture Capital Fund to foster innovation and encourage smaller start-ups to expand, passed its first reading in Parliament today.
“The fund helps fill the ‘capital gap’ faced by New Zealand firms that expand beyond the early start-up phase,” Associate Finance Minister David Parker said.
The move puts in place a key element of the Wellbeing Budget’s Economic package.
“New start-ups are well served by angel investors with some seed capital support from the Government. But mid-sized ones, between about $2 million and $20 million in size, are not well supported.” David Parker said.
“We want to increase the amount of technology that gets commercialised and to lift the level of innovation and productivity across the country. This Bill achieves those aims.
“The fund will help keep more start-ups in New Zealand for longer and support the proportion of these firms in local ownership.”
9 SEPTEMBER 2019
Government welcomes Capital Markets 2029 Report
Commerce and Consumer Affairs Minister, Kris Faafoi, says key areas of opportunity have been highlighted in a report released today to ensure New Zealand’s capital markets continue to support sustainable economic growth.
The Capital Markets 2029 report is from an industry-led working group initiated by NZX and the Financial Markets Authority.
The working group has been investigating the current framework for New Zealand’s capital markets.
“The Report indicates areas where our capital markets are working well, and this is pleasing to see.
“New Zealand’s equity market has shown good growth in comparison to global counterparts, and our debt and secondary markets are performing well.
“In addition, KiwiSaver is growing the domestic pool of savings which are available to invest in New Zealand,” Minister Faafoi said.
The Report also outlines opportunities across a range of areas that affect capital markets activity.
“There are a number of areas where work is already underway and the recommendations made by the working group will be taken into account as work progresses.
“For example, earlier this year the Wellbeing Budget established a new $300 million fund to help fill the ‘capital gap’ for New Zealand firms which expand beyond the early start-up phase. Part of this investment is ensuring the right capabilities are attracted into this market, to aid the growth of dynamic and innovative New Zealand firms,” Mr Faafoi said.
The Venture Capital Fund Bill is now being considered by Select Committee and public submissions close on 23 September.”
19 SEPTEMBER 2019
Today, a five-yearly independent review of the Guardians of New Zealand Superannuation and the NZ Super Fund was tabled in Parliament.
“The review shows the Fund is operating at global best practice levels, alongside only a small number of investors globally. It provides strong assurance that the Guardians are carrying out their mandate effectively,” Grant Robertson says.
This endorsement also validates this Government’s recent decision for the Guardians to administer the new $300 million Venture Capital Fund announced in the Wellbeing Budget.
The Beehive website includes a speech by Finance Minister Grant Robertson on October 9 last year. He mentioned the fund:
As a Government we’ve set an ambitious goal to boost New Zealand’s R&D spending to 2% of GDP by 2027, from 1.3% when we came into office.
That’s why we’ve instituted an R&D tax credit, which is expected to benefit up to 3,000 businesses, compared to the 300 receiving Growth Grants. The key features of the incentive include a 15 per cent credit rate, a $120 million cap on eligible expenditure, and a minimum expenditure threshold of $50,000 per year.
We have also established two funds to leverage private sector investment in sustainable and innovative businesses, through the Green Investment Fund and the new $300 million Venture Capital Fund.
A few weeks later Parker announced the passage of the enabling legislation –
11 DECEMBER 2019
New law sets up $300m Venture Capital Fund
New Zealand firms expanding beyond the start-up phase are set for more support after today’s passage of the Venture Capital Fund Bill, Associate Finance Minister David Parker said.
The Bill, which establishes a $300 million Venture Capital Fund, puts in place a key initiative of the Wellbeing Budget’s economic package.
The Fund will begin with $260m of available capital. The remaining $40m will be made available when required and is expected to support the fifth year of the Fund’s investment period.
19 DECEMBER 2019
Policy Statement for Venture Capital Fund
The Government has today issued the Venture Capital Fund Policy Statement outlining the requirements for investments from the new $300 million fund set up to support New Zealand firms as they expand beyond the start-up phase.
The statement accompanies the recently passed Venture Capital Fund Act and provides high-level policy directions to the Guardians of the New Zealand Superannuation Fund (the Guardians), which will oversee and monitor the performance of the Fund.\
Elevate NZ Venture Fund to lift productivity
The Government’s new $300 million venture capital fund – announced in last year’s Budget – is now open for business as the Elevate NZ Venture Fund.
Etc.
And this is where we came in…
Point of Order 