The New Zealand Venture Investment Fund expects to commit to two to three new venture capital funds over the next few years, following the government’s decision to provide a new NZD60m underwrite facility.
NZVIF chief executive Franceska Banga (pictured) says the underwrite is not a new allocation of capital but it provides NZVIF with additional capacity to commit to new venture capital funds.
“The underwrite facility is unlikely to be called, but it provides greater flexibility in the way that NZVIF manages the NZD160m which has previously been allocated to the venture capital programme,” he says. “It allows NZVIF to make commitments into new venture capital funds and then use cashflows from past investments to meet those commitments.
“The additional NZD60m 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 start-up companies.”
Since establishing NZVIF, the government has allocated NZD160m of capital to the venture capital programme and NZD40m for seed investments. Two years ago, it provided a NZD40m underwrite to NZVIF for the programme. Together with the latest underwrite, NZVIF has capacity to make investment commitments up to NZD300m. NZVIF has made investment commitments of over NZD200m to date.
