KiwiSaver fund Kiwi Wealth ventures into venture capital

Tuesday, 22 September 2020

Kiwi Wealth’s Simon O'Grady says it’s the right time to move into early stage companies.

An institutional Kiwisaver fund is taking a significant step into the riskier realm of venture capital.

Kiwi Wealth is putting up to $54 million into technology fund Movac Fund 5, run by venture capital firm Movac.

The money will make Kiwi Wealth a cornerstone investor in the $200m to $250m growth capital fund which has a specific focus on New Zealand technology start-ups and growth companies.

Movac’s managing partner Phil McCaw welcomed Kiwi Wealth’s entry into the sector.

Phil McCaw, managing partner of Movac, says moving KiwiSaver money into venture capitalism will be good for the economy.

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Kiwi Wealth is putting up to $54 million into technology fund Movac Fund 5, run by venture capital firm Movac.

‘’For many years I’ve been a vocal proponent of KiwiSaver managers allocating a small portion of their funds to the New Zealand venture capital sector.

‘’Not only has there been the potential for exceptional returns as we’ve experienced to date, but it’s also where fantastic innovation and job creation occurs.’’

Kiwi Wealth’s chief investment officer Simon O’Grady said the move could be the start of further investments in the growth and venture capital sector.

“Kiwi Wealth views this as an important first step towards a potential series of private equity investments and the beginning of a pipeline of work over the coming years to build out this asset class.

“The market is changing and those providing capital are having to venture more into the private, unlisted sector on behalf of those seeking returns on investment.‘’

Kiwi Wealth’s investment will be spread over the lifetime of the fund, which has also received a $70m contribution from NZ Super Fund, and up to $30m from NZ Growth Capital Partners, which manages the Government’s Elevate NZ Venture Fund.

The investment will be staggered over time as Movac selects and moves companies through the growth stages.