Blue Sky Venture Capital to run $50 million South Australian VC fund


ByJohn McDuling, Australian Financial Review, read full article here: www.afr.com/technology/blue-sky-ventures-to-run-50-million-south-australian-vc-fund-20170705-gx52a5#ixzz4maQbEKEx

Blue Sky Venture Capital has won a $50 million mandate to manage a venture capital fund for the South Australian government, as the battle between states to attract start-ups intensifies.
The venture arm of ASX-listed Blue Sky Alternative Investments won a competitive tender to manage the fund, which can only invest in high-growth companies from South Australia, or those willing to relocate to the state, and alongside other private investors.

Elaine Stead, who runs Blue Sky's existing venture capital exposure, will manage the fund. "South Australia is an area that is often unloved by Sydney and Melbourne based investors," she told The Australian Financial Review.

"As a result there is a supply-demand dynamic that is favourable to investors. They have got equivalent R&D [research and development] inputs, but they are not capitalising on it."

The fund will run for 15 years, and could invest in eight to 12 companies, according to Dr Stead. These could range from start-ups to more established firms seeking growth capital, and across industries including defence, food and wine, and software.

Blue Sky, which manages $3 billion worth of investments across infrastructure, real estate and private equity, says it has invested $250 million into South Australian businesses over the past decade, supporting nearly 1000 jobs.

Portfolio companies in its existing venture fund include online wine retailer Vinomofo and custom design firm Shoes of Prey.

The South Australian government decided to establish a venture capital fund last year, as part of a drive to promote innovation in the nation's second smallest state, as measured by population.

"The Venture Capital Fund will support our innovative businesses to become more competitive and reach new markets, stimulating economic activity and job creation for our state through government and private sector co-investment," South Australian Premier Jay Weatherill said in a prepared statement.

There has been a resurgence for the Australian venture capital asset class over the past two years, after years of sustained inactivity following the dotcom bust. According to the Australian Venture Capital and Private Equity Association, venture firms in Australia raised a record $568 million in the 2015-6 financial year, a figure likely to have been exceeded in the recently ended financial year.

Meanwhile, there is a fierce battle among state governments to support and incentivise start-ups, which are seen as a key driver of job growth... read more here:  www.afr.com/technology/blue-sky-ventures-to-run-50-million-south-australian-vc-fund-20170705-gx52a5#ixzz4maQbEKEx


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