St George ventures forth
St George Bank has launched its second venture capital fund with the release of a $64 million wholesale pooled development fund focussing on the booming technology and Internet sector.
St George Bank has launched its second venture capital fund with the release of a $64 million wholesale pooled development fund focussing on the booming technology and Internet sector.
The St George Development Capital II fund will focus investment on high technology and niche manufacturing small to medium enterprises with a plan to list the compa-nies on the Australian
Stock Exchange within three to five years.
The investment fund, which is managed by specialist venture capital fund manager Nanyang Management, is the bank's second initiative under the federal government's Pooled Development Fund (PDF) program.
It will invest 65 per cent of funds in high tech and e-commerce companies, while 35 per cent will be targeted to niche manufacturing companies with $5 million to $25 million in turnover each year.
The fund will target returns of around 30 per cent and target a three to five year plan for public listing.
Of the $64 million in the fund, St George will provide $20 million, with the rest coming from other institutional investors.
Institutional investors in the fund are BNP Asset Management, the Commonwealth Superannuation Scheme, Development Australia Fund, the Public Sector Superannu-ation Scheme, Queensland Investment Corp and SunSuper.
Nanyang Management executive chairman Christopher Golis says the fund was suc-cessfully established largely because of the government's recent amendments to the PDF Act. Recent amendments have increased its attractiveness as an investment vehi-cle, with primary benefits including the ability for PDF's to buy back their shares and the rebate of franking credits to eligible super funds giving them an effective tax rate of zero.
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