The Australian Government has been urged to increase thresholds under the Significant Investor Visa (SIV) program to enable migrant investors to “plug holes” in critically needed venture capital funds, according to one one fund manager.
Atlas Advisors Australia executive chairman Guy Heldley says the Australian Government should revise the complying investment framework for the SIV program to increase the asset allocation “particularly towards seed and early stage venture capital”.
Hedley urged the Australian Government to revise the complying investment framework for the SIV program to increase the asset allocation “particularly towards seed and early stage venture capital”.
“Wealthy migrant investors can fill in vital demand for capital at this crucial stage of venture capital investment,” Hedley says.
The proposal forms part of Atlas Advisors Australia’s recent submission in support of the Australian Government’s review of the Business Innovation and Investment Program.
Hedley said the venture capital or private equity fund component of the complying investment framework received more than $1 billion in annual commitments – however the volume of early stage and seed investment deals being funded has been slashed by 50% in the past two years, from 320 deals in 2017 to 138 deals in 2019.
“Of concern, is that it is this critical investment stage that generates the main economic benefits to Australia of job creation, industry growth and the patenting of next generation innovations,” Hedley said.
“Enabling migrant investors to allocate up to 50% of investment to venture capital with a reduced visa period of three years or prioritised application processing, would bring greater economic benefits than focusing allocations towards secondary public market equities.
“Venture capital is typically a 10-year illiquid investment while emerging companies’ equities are liquid,” he said.
“Revising the policy settings to increase the allocation to venture capital would materially add to the Australian economic benefits by increasing the committed term of each investment.”
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