VENTURE CAPITAL BOARD

In reply to Dr McFETRIDGE (Morphett) (26 June 2008).

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations): I have been provided the following information:

The Office of the Venture Capital Board (OVCB) does not pay any consulting fees directly to any of the eight full-time investment managers working with private sector funds based in Adelaide.

Standard industry practice has the investors in a private equity fund paying a management fee to the fund manager. This is usually a percentage of the total committed funds, generally between 1 per cent to 2.5 per cent, and is used to pay salaries and fund activities and services associated with undertaking investments and divestments. In line with this standard industry practice, the state government investment in the Paragon Private Equity Fund 1, does contribute to the management fee of the fund, on a pro-rata basis with all the other investors in the fund. The magnitude of Paragon's management fee is in line with standard industry practice.

No other management fees are paid through the OVCB to any other investment managers working with private sector funds based in Adelaide.