Elevate NZ Venture Fund (Elevate Fund) is a $300 million fund of funds that has been established by the Crown to close the current funding gap in Series A and B rounds for New Zealand high-growth businesses. The Crown has tasked the Guardians of the New Zealand Superannuation Fund with delivering the objectives of the Elevate Fund by investing into the venture capital market in accordance with best-practice investment management approaches. The Guardians of New Zealand Superannuation have in turn appointed the NZGCP to manage the Elevate Fund through a fund of funds model.
The Elevate Fund will invest into venture capital funds that are primarily looking to make Series A and B stage investments (round sizes of $2 to $20 million) into New Zealand entities. The majority of these underlying funds will be funds with a New Zealand connection while some portion may be invested alongside offshore funds that are investing into New Zealand entities. All underlying Funds will need to raise matching capital from other investors that is at least equal to the commitment from Elevate. In this way Elevate aims to stimulate approximately $1 billion of investment into Series A and B stage New Zealand businesses over the next 15 years.
The Elevate Fund aims to adapt to the market and the needs of New Zealand entities’ as the venture capital ecosystem evolves. We will seek to engage with market participants on a regular basis, further details of which will be provided in due course.
Young, dynamic firms are important in building a knowledge economy and transforming our economy to become more productive, sustainable and inclusive. These firms are agile and introduce disruptive and innovative technologies, which large corporates are often not well suited to achieve. Many of the young, dynamic firms, however, struggle to fully develop in New Zealand because of the shallowness of the specialised domestic early-stage capital markets, and especially a lack of venture capital.
The purpose of the Elevate Fund is to increase the amount of capital available to New Zealand startups and to develop New Zealand’s venture capital markets to function more effectively. If successfully implemented it is expected that over time more venture capital will become available to New Zealand entities from sources other than the Elevate Fund and that New Zealand entities that receive venture capital funding are more likely to grow into successful and sustainable businesses.
The Elevate Fund will allocate capital to fund managers on a best-practice commercial basis that takes into account the objectives of the program. Potential fund managers will be assessed based on
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NZGCP makes an initial assessment of whether an allocation to a potential fund manager would meet the objectives of the Elevate Fund.
Subject to the Elevate Fund investment committee approval, potential fund managers are assessed against a conviction review framework and Elevate Fund’s portfolio allocation framework.
The investment committee review the outcomes of diligence and potential portfolio allocation.Those approved will be provided with conditional approval for an allocation.
Proposals approved by the Elevate Fund investment committee will be issued with a time bound conditional allocation letter.
Fund manager provides evidence of external capital and satisfaction of any other conditions.
Final documentation is agreed and allocation is confirmed.
The Elevate Fund aims to provide a clear and robust due diligence process that can help to attract private capital into the New Zealand venture capital market. Further details of the investment process and conviction review framework will be made publicly available in Q1 2020.
Ready to apply? Check out the application form and get in touch with our team.
23 Mar 2020
Application form for potential investments by Elevate NZ Venture Fund
Ready to speak to a member of the team? Contact us today.
The Elevate Fund is establishing an Investment Committee which will include two independent investment committee members and will make decisions independently of those made by the Aspire Fund’s Investment Committee. The Elevate Fund Investment Committee will ensure that selection of fund managers complies with commercial best practice. Details of the Investment Committee will be available once finalised.