NSW Government set to secure equity in SMEs with ‘good ideas’ using new $150 million fund
Tue 17 October 2017 - 9:17 amFeatured | News
The NSW Government is establishing a $150 million equity fund to allow it to ‘buy a stake’ in top performing businesses across the state, Deputy Premier John Barilaro has announced.
Barilaro said the GO NSW Equity Fund, which is being established in partnership with First State Super, would see the Government take an equity stake in high-growth companies with potential to fuel job creation in metropolitan and regional areas
“The Government, through Jobs for NSW, is teaming up with one of Australia’s biggest superannuation providers to help businesses overcome barriers to growth, create more jobs, and to promote greater investment in Aussie companies,” Barilaro said.
“We’re working with First State Super and ROC Partners – one of Australia’s leading specialist private equity investors – to provide capital funding to high-growth companies in exchange for a percentage of ownership.
“This isn’t a loan or a grant program, but the government actually investing in businesses, by buying a stake in them. Any returns or profits generated by our equity stake will go back into the fund to help more businesses.
“We are the first government to team up with a super fund in this way, proving we are a government that’s prepared to think outside the box.”
First State Super will allocate an initial $100 million and the NSW Government, through Jobs for NSW, will add a further $50 million to the fund. At least 20% ($30 million) will be invested in regional businesses. The fund will primarily target companies with an enterprise value of between $20 million and $50 million that are looking to embark on a significant expansion. It is estimated the fund will create up to 2500 new jobs and a further 2400 jobs by 2025 using recycled funds.
“We have $150 million ready to go, and we’re on the hunt for good businesses with good ideas to invest in,” Barilaro said.
“Investing in businesses will always carry a level of risk, but we’re prepared to take that risk, because with risk comes reward, and it’s how you unveil the next Uber, Google or Atlassian.
“The partnership with First State Super and ROC Partners means every investment will be well-considered and made with expert advice,” he said.
First State Super CEO Michael Dwyer, said the company was proud to be working with Jobs for NSW and ROC Partners to support the growth of NSW businesses.
“As a highly member focused, profit for member super fund, our top priority is to deliver strong, sustainable returns to our members over the long term,” Dwyer said.
“Our size enables us to invest in ways that make a positive impact on the economy, the environment and the communities in which our members live, work and retire.
“Through the GO NSW Equity Fund we will be supporting successful small and medium-sized companies that are ready to embark on a new phase of expansion, and in turn help to create new jobs, support growth in regional communities and deliver other positive social impacts,” he said.