SIV changes good for small cap sector
Changes to the Significant Investor Visa (SIV) program have the potential to redirect investments into emerging listed Australian companies according to a specialist small and microcap fund manager.
Acorn Capital, head of equities, Douglas Loh said the changes introduced on 1 July this year restricting SIV investments into residential property would benefit small listed companies as the new requirements allow for sizeable overseas investments into this sector.
The changes, announced by the Federal Government, require SIV investors to invest at least $5 million over four years into three categories of complying investments.
These categories are venture capital and growth private equity funds, balancing investments such as Australian corporate bonds, shares and non-residential property through managed funds or listed investment companies, and emerging companies.
"The changes to the SIV complying investment categories will provide a valuable additional source of funding for emerging listed Australian companies and will promote the growth of this sector," Loh said.
According to Loh the SIV investors are generally wealthy Asians looking to immigrate to Australia and the SIV program provided access to a more mature and developed investment market.
Loh said SIV investors would also seek out experience managers in the Australian market as previously, the bulk of money flowing through the SIV program was into passive investments which have already attracted large capital flows.
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