Partnership opens doors for fund managers

First published in the New Zealand Herald on Thursday October 18, 2012

The Government-backed New Zealand Venture Investment Fund says a partnership with its Taiwanese counterpart will open doors to Asian venture capital networks for local fund managers and the high growth firms they invest in.

NZVIF has signed a co-investment partnership with Taiwan’s National Development Fund (NDF), which it says could invest up to $200 million into funds in Taiwan and this country.

Through the partnership, NZVIF and the NDF will invest up to $25 million each in any new venture capital fund in New Zealand or Taiwan.

Venture capital fund managers will have to raise 40 per cent of total fund capital from private sources.

“At least half of any fund will be invested into New Zealand companies,” NZVIF said.

Franceska Banga, NZVIF’s chief executive, said the partnership was aimed at stimulating more venture capital activity and opening access to Asian networks for the local industry.

“This partnership makes the prospect of larger venture capital funds possible, which will help to build the capacity and capability of the New Zealand venture capital sector,” Banga said. “If a New Zealand venture capital fund manager is able to raise $30 million from private investors, the partnership could invest around $45 million, meaning a total fund size of around $75 million, which is considerably larger than might otherwise be the case.”

She said the partnership could see up to five VC funds established, which would invest in high-growth Kiwi and Taiwanese firms.

“For New Zealand companies receiving investment, the partnership offers significant benefits in opening up access to Taiwanese expertise, follow-on capital and extensive networks into Asia,” Banga said.

She said Taiwan was New Zealand’s eighth-largest export market and the island nation, off the coast of China, was already an important source of investment.

“[Taiwan] has a strong venture capital sector and has made considerable progress in developing its high-tech sector across a number of industries, including most recently green technology,” Banga said.

She said the partnership was designed to invest equally in companies in Taiwan and New Zealand.

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