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SIV to raise $3.5bn annually: Basis Point

Recent changes to the significant investor visa (SIV) investment framework will see a flow of liquidity into underfunded sectors such as venture capital and the small cap space, says Basis Point.


From 1 July 2015 applicants for the Australian government’s SIV are required to allocate $500,000 to venture capital, $1.5 million to emerging companies and $3 million in one or more balancing investments such as Australian corporate bonds.

Speaking at the Basis Point third annual Significant Investor Visa conference on Wednesday, Basis Point managing director, David Chin, said the program leads to “opportunities across the board”.

According to Mr Chin, it is expected that 700 SIVs will be granted each year – raising a total of $3.5 billion.

As a result, the SIV will “resolve the capital shortage in the VC and small cap space,” Mr Chin said.

“There will be more funds and more competition in this space [and] competition is ultimately a good thing for the underlying investing companies.”

Mr Chin argued that the additional capital will also provide the needed incentive for VC firms to remain in Australia instead of seeking opportunities abroad.

Mr Chin’s optimism was echoed by NAB Private Wealth general manager Jason Murray, who said the changes to the SIV regime are “important” and “exciting”.

“The place in which Australia finds itself today, on the doorstep of the most populous and fastest growing nations in the world is an extremely exciting [prospect],” Mr Murray said.

Although there has been concern voiced over the changes, industry professionals present at Wednesday's conference largely supported the move. 

Blue Sky Alternatives investment director Elaine Stead said the new SIV regime will have a positive impact on Australian innovation.

“It’s a fantastic program that well and truly meets the objective of setting up those programs, which was to encourage more investment into the innovation sector in Australia,” Ms Stead said.

Lily Ong Business Lawyers and Migration Consultants owner and principal solicitor, Lily Ong, said that through the new requirements, it has been signalled that Australia is "open for business".

 

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