{"id":43485,"date":"2023-10-20T15:28:55","date_gmt":"2023-10-20T15:28:55","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/major-shift-as-super-funds-begin-to-unlock-venture-capital-startupsmart\/"},"modified":"2023-10-20T15:28:55","modified_gmt":"2023-10-20T15:28:55","slug":"major-shift-as-super-funds-begin-to-unlock-venture-capital-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/major-shift-as-super-funds-begin-to-unlock-venture-capital-startupsmart\/","title":{"rendered":"\u201cMajor shift\u201d as super funds begin to unlock venture capital – StartupSmart"},"content":{"rendered":"
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There has been a \u201cmajor shift\u201d in the amount of venture capital on offer for Australian startups as the tech community finally begins to unlock the super funds, AVCAL chief executive Yasser El-Ansery says.<\/p>\n

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Convincing these superannuation funds to plunge more money into venture capital has long been a mission for the startup community and both sides of politics have recently joined the cause.<\/p>\n

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Now with increased pressure from Canberra, it seems the key is finally turning.<\/p>\n

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\u201cI\u2019ve seen a major shift in the past few months and I think that the messages coming from the new federal government are helping to instil greater confidence in our long-term future,\u201d El-Ansery tells StartupSmart.<\/i><\/p>\n


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\u201cInvesting capital into high-growth Australian businesses is now seen as a national economic priority and it needs to remain a priority for the foreseeable future.\u201d<\/p>\n

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The rise of the $200 million funds<\/b><\/p>\n

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Hostplus became the latest super fund to commit large amounts of funds to VC this week, announcing plans to invest $400 million over the next five years, as the AFR<\/i> reports.<\/p>\n

The giant contributed to two of Australia\u2019s three $200 million venture fund \u2013 Blackbird Ventures and Brandon Capital\u2019s medtech fund.<\/p>\n

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It comes as First State Super also plans to double its $120 million investment in that medtech fund and Australian universities and the CSIRO are in deep discussions with super funds to set up commercialisation funds of their own.<\/p>\n

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\u201cThere is a build-up of momentum now from some super funds that are looking very closely at the metrics of allocating into venture capital funds,\u201d El-Ansery says.<\/p>\n

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\u201cA few years ago that simply wasn\u2019t happening.\u201d<\/p>\n

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Filling the gaps and stemming the tide<\/b><\/p>\n

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Having these large funds turning their attention to startups and the tech world will help to fill the country\u2019s funding gap and stop the flow of Australian entrepreneurs leaving our shores, El-Ansery says.<\/p>\n

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\u201cWe have not had a sufficient depth of capital available to invest with businesses requiring later stage funding and that\u2019s why we\u2019ve seen so many entrepreneurs relocate to the US and other markets,\u201d he says.<\/p>\n

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\u201cSeeing more capital flow from super funds into venture, especially for late-stage venture, is very good news for Australian businesses.<\/p>\n

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\u201cWe\u2019ve been working with the government and with the regulators for some time now on removing a number of roadblocks getting in the way of super funds allocating capital into venture and private equity.\u201d<\/p>\n

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Political backing<\/b><\/p>\n

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A desire to unlock super funds for venture capital has gained widespread bipartisan support this year. Methods for doing this were a big theme in the federal government\u2019s inaugural Policy Hack last month and is likely to feature in next week\u2019s innovation statement.<\/p>\n

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The opposition also conducted a roundtable discussion with heavy hitters in both camps<\/a> last month in an effort to bring both sides of the equation together.<\/p>\n

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But El-Ansery says there is still a lot to be done in politics to remove the barriers that are preventing more super funds going into venture capital.<\/p>\n

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\u201cOne of the things that the government still needs to do is fix the new regulations which will force super funds to publicly report the market valuation of their unlisted investments into venture and private equity next year,\u201d he says.<\/p>\n

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\u201cIf those regulations come into force as planned, it will disadvantage super funds who want to keep investing into unlisted high-growth Australian businesses and we can\u2019t afford for that to happen.<\/p>\n

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\u201cThe other thing we need to do is rest the conversation about the design and regulation of our superannuation system. We have to move away from a one-side focus on fees, towards a more balanced approach where net returns to fund members is the central objective in the context of accumulation.<\/p>\n

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\u201cIf we don\u2019t do that, we will continue to see constraints around our capacity to invest in high-growth Australian businesses through later-stage funding.\u201d<\/p>\n

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Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on<\/i> Facebook<\/i>,<\/i> Twitter<\/i>, and<\/i> LinkedIn<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

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