In anticipation of a new boom in early-stage investments in Australia, Southern Cross Venture Partners has launched a $200 million fund that will focus on investments in Australia’s research and development market.
One of the largest of its kind in Australia, the fund will focus on early stage investments in materials, electronics, IT, telecommunications, nanotechnology, environmental science, defence and clean energy.
“The fallout from the tech bust saw investors move towards more conservative later-stage investments, but the time is now ripe for early-stage investing as a new stream of experienced entrepreneurs and interesting innovations emerge,” Bob Christiansen, managing director Southern Cross Venture Partners, said.
The fund has received strong support from leading Australian institutional investors, including Macquarie Funds Management, and has just completed its first close at $100 million.
The fund will be capped at $200 million, a level Southern Cross Venture Partners anticipates will be reached by the end of the year.
The fund, which expects to conclude its first investment in the coming weeks, will seek to generate strong returns by taking advantage of favourable conditions in the Australian marketplace for early-stage capital investment.
“Our experience shows the Australian early-stage market is grossly undercapitalised with not enough capital to support the qualified deal-flow for at least the next four to five years. This in turn presents terrific opportunities for the fund to access the best deals at very attractive prices,” Christiansen said.
Southern Cross Venture Partners will capitalise on its existing commercial and venture capital relationships in the US to move investee companies into the global arena and secure follow-on investments with top-tier international venture capital firms.