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Investment Insights

Kiwi Invest secures Movac investment for Kiwi Wealth KiwiSaver Scheme

Contributor

Written by Contributor

Thursday 24 September, 2020

Venture capital firm Movac has secured investment from Kiwi Invest for the Kiwi Wealth KiwiSaver Scheme to become a cornerstone investor in the new Movac Fund 5 technology fund. It marks the first time an institutional player within the KiwiSaver space has entered the growth and venture capital ecosystem at this scale.

Movac Fund 5 is a $200-$250m growth capital fund which has a specific New Zealand focus and will invest over time in technology start-ups and growth companies. Its design allows it to support early stage companies as they grow, with capital available for later funding rounds, as well as investing in later-stage companies.

Kiwi Invest is the investment manager for the Kiwi Wealth KiwiSaver Scheme and has committed up to $54m in capital over the lifetime of the Fund. It joins contributions from NZ Super Fund ($70m), NZ Growth Capital Partners (up to $30m), with the balance from experienced entrepreneurs, family offices, individual investors, and several iwi. First close of Fund 5 will be September 23, and second close on 23 October.

Founded in 1998, Movac is a well-established and resourced venture capital firm in the technology sector and was selected by Kiwi Invest after a thorough due diligence process.

Simon O’Grady, Chief Investment Officer, Kiwi Invest, says, “Kiwi Invest views this as an important first step towards a potential series of private equity investments and the beginning of a pipeline of work over the coming years to build out this asset class. Kiwi Invest may look to build and diversify in this sector, based on the manager, geography and asset type from an investment perspective.

“Movac has a talented and experienced investment team, sound and well-tested processes, and a strong track record in supporting successful New Zealand tech start-ups and growth companies, helping them to grow their businesses globally.

“The market is changing and those providing capital are having to venture more into the private, unlisted sector on behalf of those seeking returns on investment. Kiwi Invest saw that it was the right time, with the right manager, and in the right sector for this investment.”

The investment will be staggered over time as Movac goes through the process of selecting companies for funding and working directly to move them through the growth stages. Fund 5 is focused on backing this process in a graduated way, supported by thorough due diligence by all parties.

The longer-term nature of the investment is consistent with the Kiwi Wealth KiwiSaver Scheme’s function as a long-term savings vehicle. It offers an opportunity for returns while remaining a small proportion of the diversified growth assets in the Scheme.

Phil McCaw, Managing Partner at Movac, says, “We are pleased to have successfully raised Movac Fund 5, and delighted to have Kiwi Invest on-board as a cornerstone investor – this is also the introduction of Kiwi Invest to venture capital investment.

“I’m delighted to have the support of Kiwi Invest as a cornerstone investor in Movac Fund 5. For many years I’ve been a vocal proponent of KiwiSaver managers allocating a small portion of their funds to the New Zealand venture capital sector. Not only has there been the potential for exceptional returns as we’ve experienced to date, but it’s also where fantastic innovation and job creation occurs.

“It is great to have a major KiwiSaver investment manager in the growth and venture capital ecosystem supporting the rapid expansion of local businesses. 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 Invest team for showing true market leadership in the sector with their significant investment in a venture capital fund like Movac Fund 5, and we look forward to working hard on their behalf to deliver great investment results.”

NZ Super Fund Head of External Investments and Partnerships Del Hart says its investment in Fund 5 highlights its continued commitment to identifying commercially attractive opportunities to invest in New Zealand.

“This investment will help support the growth of local technology businesses that are high growth, typically internationally focused and will benefit from the management expertise and connections that come from an experienced and successful fund manager like Movac.

“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.”

New Zealand Growth Capital Partners Investment Director James Pinner said the significant investments from institutional investors demonstrate that New Zealand venture capital is a viable and investable asset class.

“The hope is that other institutional investors – and other KiwiSaver funds in particular – will meaningfully invest in this asset class. What is also pleasing is the level of private investment being raised. The government’s requirement for the Elevate NZ Venture Fund is that it must invest alongside at least matching private capital. Elevate’s initial $10 million has been matched by $150 million of private capital and we expect there to be ratio of over seven times as much private capital as our investment at the Fund’s final close.”

About Kiwi Invest

An investment approach that serves no goals but yours. New Zealand’s smart money grows here. Get tailored investment advice from a local team with a global focus, with $7.4 billion under management (as at 31 August 2020).

At Kiwi Invest, we offer significant private and wholesale investors a personal investment service - defined by a more global and objective focus to investment decisions and a track record of long-term performance through a broad range of market conditions. Kiwi Invest is also the investment team behind all of Kiwi Wealth’s funds.

Kiwi Invest is part of the Kiwi Group, owned by NZ Super Fund, New Zealand Post and ACC but operate completely independently.

Our culture is based on true guardianship built on putting clients first and transparency. We take Responsible Investment seriously, applying RI principles across all our funds.
Because as Kiwis, we know that doing the right thing, is the smart thing too.

About Movac

Founded in 1998, Movac is New Zealand's most experienced and successful venture capital firm, providing support to foster Kiwi founders and accelerate the growth of their tech businesses. Current portfolio companies include Aroa Biosurgery, Author-it, Vend, Unleashed Software, Parking Sense, Timely, Coretex, Mobi2Go, Revolution Fibres and TracPlus. Past portfolio companies include PowerbyProxi, Trade Me, eBus, Givealittle, and GreenButton.

About Movac Fund 5 LP

Movac Fund 5 is a $200-$250m growth and venture capital fund that will invest in a broad portfolio of 20-25 New Zealand technology companies, diversified by stage and sector, ranging from across the spectrum from pre-revenue/pre-Series A, to Series A and Series B.

About NZ Super Fund

The New Zealand Superannuation Fund invests money on behalf of the New Zealand Government to help pay for the increased cost of universal pension entitlements in the future. By doing this the Fund adds to Crown wealth, improves the ability of future Governments to pay for universal pensions, and ultimately reduces the tax burden on future New Zealanders. A long-term, growth-oriented investor, the Fund has around NZ$48 billion in assets, including more than $6 billion invested in New Zealand. The Fund is managed by a Crown entity, the Guardians of New Zealand Superannuation.

About NZGCP

Was established by the Government to build a vibrant early-stage investment, it manages the Elevate NZ Venture Fund - a $300m fund of funds program which looks to fill the capital gap for high growth New Zealand businesses at the Series A and B fund raising stage. Elevate’s objectives are to stimulate a functioning venture capital industry and make sure that high-growth New Zealand businesses have access to the capital and connections that they need in order to be successful.

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