Superannuation industry support for Kim Beazley’s pledge to increase the industry’s investment in local venture capital schemes has been positive, but not without qualifying statements.
Beazley made the remarks about superannuation funds needing to invest more in local research and development (R&D) businesses at the launch of his Knowledge Nation Taskforce Report last month.
But Association of Superannuation Fund of Australian (ASFA) CEO Philippa Smith says the super industry already accounts for 70 per cent of all investments in local venture capital businesses.
She says while she supports the idea of assisting local business initiatives, at the end of the day, super fund member savings and retirement aspirations come first.
“Kim Beazley’s idea is fine if it is carried out by offering ‘carrots’ to the industry, as opposed to directing super fund investment,” she says.
“But superannuation is already a major provider of venture capital investment in Australia, and has poured $1.7 billion into venture capital enterprises.”
But so long as the Government offers ‘carrots’ to the industry, such as tax incentives, a push to lift business plan standards, and Government partnering with ventures, then super trustees will probably be swayed to increase the stake in local venture capital.
But this stake will always be relatively small, Smith says.
“Venture capital fund investment should never be more than a small asset class,” she says.
