What is the Victorian Business Growth Fund?
The Victorian Business Growth Fund is a $250 million program to support long‑term growth opportunities for businesses and boost employment and economic development across the State.
The Victorian Business Growth Fund is a Victorian-first initiative that will invest in business on commercial terms and take an equity stake in business, rather than providing a grant.
Established by the Victorian Government and First State Super, the Victorian Business Growth Fund will operate for 10 years and will help to address barriers faced by successful small and medium enterprises (SMEs) that are ready to grow their business but can’t access the funds or find the right partner they need to take the next step.
The Victorian Business Growth Fund will back permanent, high-skilled jobs in priority areas of the economy; jobs that improve workforce diversity, jobs for people that have been unemployed or have a harder time gaining employment and jobs for people trying to reskill and for apprentices.
Roc Partners has been engaged to manage the Victorian Business Growth Fund. The fund will be operated out of a new Victorian office, ensuring local knowledge is leveraged to support the success of the Fund.
How it works
All investment decisions will be made by Roc Partners based on a commercial assessment about the potential growth and return profile for the business, governed by an investment mandate agreed by the Victorian Government and First State Super.
The Victorian Government will have no involvement in investment decisions.
The Victorian Business Growth Fund will invest in businesses on commercial terms and take either an equity or debt stake in businesses, rather than providing a grant. The fund manager will be targeting a commercial return on its investment and will also provide strategic insights, expertise and commercial experience to accelerate growth outcomes for Fund investments.
Roc Partners will deal fairly and transparently with existing business owners as the terms of the Victorian Business Growth Fund’s investment in businesses is negotiated, in line with the terms of the Fund as agreed by the Victorian Government, First State Super and Roc Partners. The fund manager will share with existing shareholders information on the implications on the governance arrangements as a consequence of receiving an investment from the VBGF to ensure they are informed before entering the transaction.
While the Victorian Government will not be involved in direct investment decisions, the Government has worked alongside First State Super and Roc Partners in determining the eligibility criteria for the Fund to ensure that they benefit Victoria.
The Victorian Business Growth Fund will consider businesses that:
- Victoria – present a compelling growth opportunity to Victoria, meaning that it is expected to lead to growth in a Victorian business, fund growth of a business expanding into Victoria, lead to meaningful job creation in Victoria or add meaningful capital investment in Victoria
- Revenue – have annual revenue of between $5 million and $100 million
- Assets – have no more than $250 million in assets
- Cash flow – have positive cash flow, or cash flow is expected to be positive during the investment
A similar program was run in NSW called the GO NSW Equity Fund.
Some of the recipients of this program were:
- Stone Axe Pastoral, – a Western Australian cattle business, expanded into NSW buying a 2145 hectare Northern Tableland property to run around 2000 full-blood wagyu, the world’s most expensive beef. The business is aiming to become the country’s biggest wagyu beef producer. The deal in February 2018 was expected to create 76 full-time jobs over the next five years.
- Australia’s Oyster Coast – an oyster collective based on the NSW south coast, which counts more than 45 NSW oyster growers among its shareholders. Producers who were not part of the collective, including the NSW Farmers Federation Oyster Committee chair, Caroline Henry, criticised the deal, which totaled $20 million, including $10 million from ROC Partners and $6.7 million from First State, as “not a good look for the industry”.
A NSW Treasury paper said the two investments had “attracted negative publicity and many parliamentary questions”, recommending the government’s involvement in GoNSW Equity Fund should cease and they should exit the existing investments.
NSW government winds up high powered board of job-creating agency
The state government is scrapping the board of the high-powered Jobs for NSW agency that was helping drive the creation of 150,000 jobs in start-ups and emerging small to medium businesses.
The board was promoted as consisting ‘some of Australia’s best business and entrepreneurial minds’, including former Telstra chief executive David Thodey, former AMP chief Craig Dunn, former head of biotech giant Cochlear Chris Roberts and Department of Premier and Cabinet secretary Tim Reardon.
The NSW government has killed off David Thodey’s high-powered board backing startups and SMEs
The NSW government is getting rid of the board tasked with investing $190 million in startups and SMEs with $70 million of the funds still unallocated.
The Jobs for NSW board, led by CSIRO chair David Thodey, and other senior business leaders, including Sydney tech hub Stone & Chalk chair, Craig Dunn, Navitas exec Helen Zimmerman, and former Cochlear boss Dr Chris Roberts, was meant to provide a quick response to a rapidly changing economy to 2020, and set a path to job creation over the next 20 years.