New $150 million Equity Fund backs mid-sized growth in NSW

The GO NSW Equity Fund will support successful small and medium-sized companies that are ready embark on significant expansion. The state government hopes the capital funding will create up to 2500 new jobs, boost regional communities and encourage a range of positive social impacts.  A further 2400 jobs could be created by 2025 through additional investment from recycled funds.

The fund is a partnership between Jobs for New South Wales, First State Super and private equity investment firm ROC Partners, First State Super will put an initial $100 million to the fund and the NSW Government’s Jobs for NSW initiative will add a further $50 million.  It will cater for companies with an enterprise value of between $20 million and $50 million and at least $30 million of the funding – 60% of the Jobs for NSW contribution – will be given to companies in regional NSW.

NSW Deputy Premier John Barilaro, who also serves as Minister for Regional NSW, Small Business and Skills, said the government is ‘thinking outside the box’ in offering an alternative to traditional loan or grant programmes.  Launching the scheme he underlined that the fund should be self-sustaining, with profits reinvested to help more businesses.

NSW Finance Minister Victor Dominello said the Fund should provide a better return for state taxpayers than handouts which compelled nothing in return and hoped NSW would see more ‘unicorns’ as a result.  While other new programmes target start ups, including The Sydney School of Entrepreneurship which opened in August and the Sydney Startup Hub due for early 2018, the fund could help established mid-sized firms take the next step, given the reluctance of banks to lend to companies in the regions.

Superannuation funds have long been criticised for their failure to invest in Australian innovation and mid-sized companies, preferring the security of more conservative investments in corporates, mining and property, and the move marks a welcome step towards unlocking a portion of Australia’s vast superannuation pool to drive growth in the wider economy.