AVCAL welcomes venture capital spending
The Australian Private Equity and Venture Capital Association (AVCAL) has welcomed the Federal Government's move to channel funds from the significant investor visa programme into venture capital and small business.
Head of policy and research Dr Kar Mei Tang said although venture capital and private equity managers see a line-up of start-ups every year, they struggle because institutional investors are lowering their exposure to higher-risk ventures.
"Even if a small proportion of these funds are invested into Australian venture capital to back more commercialisation activity, this will be a good start towards helping to grow the "D" in "R&D"," Tang said.
Trade and investment minister Andrew Robb told The Australian he does not see any point in the funds going into low-risk government bonds, an Australian Securities and Investments Commission (ASIC)-regulated managed funds, or shares in blue-chip companies.
Almost $2 billion has gone into these investment areas.
Robb wants the funds to move from wealthy investors (mostly Chinese nationals), into companies that need capital such as small-cap companies, start-ups, and early-stage exploration companies.
AVCAL said its previous submissions to the Government called for the Australian government to follow other jurisdictions who are adopting immigration policies that channel funds into domestic venture capital industries.
"Australian early-stage companies have, for many years now, been increasingly squeezed for capital owing to many traditional institutional investors decreasing their exposures to higher-risk ventures over time," Tang said.
AUTHOR
Malavika Santhebennur
Recommended for you
AUSIEX has announced it will acquire FIIG, a specialist fixed income provider with $4.5 billion in funds under advice.
Platinum Asset Management has announced it is in discussions with a global alternatives fund manager regarding a possible merger to create an $18 billion firm.
Frontier Advisors has bolstered its Japanese footprint through a partnership with the $350 billion asset management arm of Nippon Life Insurance Company.
JP Morgan Asset Management has appointed an ETF specialist from Vanguard as it seeks to expand its ETF range.
