Ministerial Statement

Venture Capital Fund

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (14:19): I seek leave to make a ministerial statement on the subject of the South Australian Venture Capital Fund.

Leave granted.

The Hon. K.J. MAHER: I rise to inform the chamber about the announcement of a fund manager for the South Australian Venture Capital Fund. As part of a suite of innovation initiatives in the 2016-17 state budget, the government committed to establishing a $50 million SA Venture Capital Fund. The SA Venture Capital Fund will support local ventures with high-growth potential to secure funding and accelerate growth into national and international markets, stimulating economic growth and job creation in South Australia.

The search for a fund manager commenced in early December 2016 and I am advised that the government received 12 submissions in total from local, interstate and overseas organisations, of which five were shortlisted and interviewed. The government is able today to announce that Blue Sky Venture Capital, one of Australia's leading venture capital fund managers, has been selected to manage the state government's 15-year venture capital fund.

Blue Sky Venture Capital has a track record of providing venture capital to business in domestic and international markets, investing in companies across a range of industries, including consumer technology, e-commerce, medical devices and specialty pharmaceuticals. The fund manager has a favourable record of performance and is in the top quartile of venture capital fund managers globally.

Blue Sky Venture Capital is a subsidiary of ASX listed Blue Sky Alternative Investments Limited, which has offices across Australia and in New York, with strong networks to angel investors, high net worth investors, self-managed super funds and institutional investors, including industry superannuation funds. The company has more than $3 billion in assets under management and has invested more than $250 million in South Australian businesses that employ around 1,000 people.

Dr Elaine Stead, who hails from South Australia and has more than 10 years' experience as a venture capitalist specialising in technology commercialisation, will lead the management of the SA Venture Capital Fund. I understand that Blue Sky's Adelaide office will be bolstered by a dedicated South Australian Venture Capital Fund investment director and an investment analyst, as well as other senior Blue Sky staff.

The fund is structured as a co-investment fund that requires the state government to invest alongside private venture capital funds. This means that the agreement will also result in an extra $50 million in external capital being available to support innovative South Australian companies on top of the state government's $50 million investment.

The South Australian Venture Capital Fund is structured as a notional fund within the balance sheet of the South Australian Government Financing Authority and will make new investments in the first seven years and use the remaining years to make follow-on investments in its portfolio companies to accelerate their growth.

The management and operation of the South Australian Venture Capital Fund and fund manager, Blue Sky Venture, will be overseen by an inaugural management committee, the members of which are in the process of being appointed. Two government observers will also serve on the management committee: Ms Heather Watts, Director of Commercial Operations, South Australian Financing Authority, and Dr Andrew Dunbar, Director of the Office of Science, Technology and Research, Department of State Development.

Companies that receive investment from the South Australian Venture Capital Fund must have at least 50 per cent of their assets and at least 50 per cent of their staff located in South Australia for a minimum of 12 months from the date of the initial investment. The South Australian government is establishing the conditions for the South Australian Venture Capital Fund to succeed. The South Australian Venture Capital Fund will benefit from the already established $10 million Early Commercialisation Fund, which targets the early stage financing gap that many young start-ups experience.

Grants have been approved for 26 companies through the South Australian Early Commercialisation Fund and it is anticipated that a number of these companies will make the natural progression to access funding through the South Australian Venture Capital Fund to further accelerate their activities. This announcement is an exciting development that will assist in investing in promising high-growth companies in South Australia that have the potential for global growth.