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NZVIF to back up to three New Zealand VC funds after sealing state underwrite facility

27 Feb 2013

new zealand auckland_sqFund investment group  New Zealand Venture Investment Fund (NZVIF) has said it expects to commit to two to three new venture capital funds over the next few years, following the government’s decision to provide it with a new NZ$60m ($50m) underwrite facility.

According to NZVIF chief executive Franceska Banga, the facility is unlikely to be called, but it provides greater flexibility in managing the NZ$160m previously allocated to the venture capital programme.

The latest underwrite has boosted the fund’s capacity to make investment commitments to $300m.

Banga said, “The additional NZ$60m in the form of an underwrite of NZVIF is timely and welcome.

“It enables us to progress with new investment partnerships, like the recently announced co fund partnership with Taiwan’s National Development Fund.

“We expect to see two to three new funds beginning the capital raising process over the next three or four years which, if established, will help the flow of growth capital for startup companies.”

The fund has so far made commitments of up NZ$200m across eight venture capital funds and 14 angel group partnerships.

It has so far invested a total NZ$117m in 126 companies including Orion Health, SLI Systems, PowerbyProxi, Booktrack, BioVittoria and Zephyr Technology, which have raised a total investment capital of NZ$700m.

These businesses have so far earned revenues of NZ$1.25bn including export earnings of NZ$945m.

According to research from government-backed investment group New Zealand Venture Investment Fund, private equity investments into unlisted New Zealand companies have, on average, doubled over the investment holding period.

The research analysed returns generated from investments into companies made by New Zealand and Australian private equity funds over 18 years between 1994 and 2012.

Thirteen funds invested NZ$1.36bn ($1.11bn) into 92 companies. Those investments returned $2.85bn ($2.32bn) upon realisation, the report found.

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