First State Super chief investment officer Richard Brandweiner spoke about his fund’s continuing investment in venture capital at the H2 Ventures Fintech Expo in Sydney yesterday.
The $52 billion super fund announced a $110 million investment in technology venture capital firm Blackbird Ventures in September 2015 alongside Hostplus, which made a smaller contribution.
Mr Brandweiner said he wants to build out a venture capital platform “triangle” within First State Super’s portfolio, with broad technology, fintech and ‘bio sciences’ at the corners.
“Broad tech is the biggest area; fintech has great relevance for us as a retail financial services provider; and a large part of our membership is in the health sector, so bio science is another area,” Mr Brandweiner said.
“In each of those areas [we want] to both seed those early stage ideas through a partner, and then hopefully get access to some promising follow-on funding.”
Mr Brandweiner said First State Super’s approach to venture capital is backed by the fund’s ‘universal ownership’ philosophy.
“The reality is that the thing that’s going to make the biggest difference to our members’ returns – indeed, all of our returns in our superannuation – is actually the performance of the entire economy,” Mr Brandweiner said.
“Earnings, productivity growth. These sorts of things are going to be far more important than any stock that we buy or bond that we buy.
“So investing in things like venture capital is actually far more important when you think about it in the broader context.
“[We want to] keep ideas at home [in Australia], keep talent at home – it’s not immediately what you think about [for a super fund] because it’s not making money today, but it’s actually driving the long-term returns for our members.
“And it’s completely consistent with the fiduciary duty of optimising [our members’] long-term retirement savings,” Mr Brandweiner said.
