23 Sep 2020

KiwiSaver funds used to back local tech start-ups

3:04 pm on 23 September 2020

Kiwi Wealth KiwiSaver members will be helping back New Zealand tech start-ups through a $54 million investment from the fund into a venture capitalist company.

The Government has canned the $1000 KiwiSaver kickstart programme.

Photo: 123RF

The Movac Fund 5 is a $250m fund that would back New Zealand tech start-ups and growth companies.

The investment was the first time a KiwiSaver provider had backed such a firm.

Kiwi Wealth's commitment sits alongside $70m from the NZ Super Fund and the balance from entrepreneurs, individuals and iwi.

Kiwi Wealth retail and product general manager Melissa Vasta said it was the start of the fund's progression into a more diversified portfolio.

"We are looking to move into the private, un-listed sector so we have been keeping an eye on things for the past few years and this opportunity came up, the Movac team were great... it just made sense for us."

"By allocating a small percentage of our total KiwiSaver funds to Movac's Fund 5, our members are fuelling the next wave of Kiwi innovation, with the opportunity to enjoy the returns of supporting Kiwi success stories."

Vasta said it was a great chance for the fund to invest locally.

"We've traditionally had a global focus, which does include New Zealand, but previously because of liquidity, scale, pricing, it's prevented us investing in New Zealand listed entities and there have also been few significant opportunities that meet our criteria.

"Our members have been quite keen for us to invest in New Zealand, so we do get questions as to why we don't invest more heavily [locally] so it's quite exciting the opportunity has come together."

Movac managing partner Phil McCaw said it was fantastic to have Kiwi Wealth onboard as cornerstone investor.

"This long-term alignment is innovative and shows leadership and a new maturity in New Zealand tech and the investment sector.

"I congratulate the Kiwi Wealth team for showing true market leadership in the sector." he said.

NZ Super investments head Del Hart said the investment was a good fit for the fund.

"Fund 5 is our second investment with Movac, following a $50m investment in Fund 4 in 2016 and, along with mandates with other local investment managers, represents an efficient way for the Fund to gain access to growth opportunities in small-medium sized New Zealand growth businesses."

The first close of Fund 5 will be 23 September, and the second close on 23 October.

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