Don’t write off SIV program yet: Blue Sky

Don’t write off SIV program yet: Blue Sky

The apparent lull in significant investor visa (SIV) applications since the start of the new regime on 1 July does not mean applicants have been "scared off", argues Blue Sky Alternative Investments.


Speaking to InvestorDaily, Blue Sky Venture Capital investment director Elaine Stead cited reports that there have only been nine applications to the new SIV regime.

The new SIV regime, which grants an Australian visa to applicants as when they make $5 million in qualifying investments, requires applicants to make a greater investment in venture capital and private equity, as well as listed investment schemes.

Blue Sky's SIV-compliant venture capital fund has had five of the applications to the new regime, Ms Stead said.

"That’s actually significantly better than we were expecting at this point of the cycle."

Fears that the changes to the qualifying investments would "kill" the SIV program appear to have been grossly overstated, Ms Stead said.

"The reforms have not scared people off, they’re just more complex and people are really just trying to understand who’s who in the landscape and who’s providing a product that they can be really confident meets the requirements of the new reforms," she said.

Blue Sky partners with groups like Morgan Stanley who have been servicing migration agents and SIV applicants "for some time", she added.

She explained that the big challenge for venture capital funds like Blue Sky has been to educate potential SIV applicants about the benefits of venture capital.

"We went on a education roadshow to Hong Kong and spoke to migration agents about what venture capital is.

"[We wanted] to demystify it a bit for them. I can understand why if you’ve never operated in the space before it’s probably a little bit confusing and confronting," she said.

The appetite of new Prime Minister Malcolm Turnbull for venture capital is helping to "change the conversation" on the topic, she said.

"The change in prime ministership is allowing people to see the potential impact this has on the economy and jobs," Ms Stead said.

Pointing to US, she noted that venture capital investment in that country is worth just 0.2 per cent of GDP, yet venture capital-backed companies contribute 21 per cent of GDP when it comes to revenue.

"The SIV will see a good chunk of foreign funds contribute actively to the growth of venture capital in Australia, which will help provide the sector with enough scale to invest in enough companies and provide sufficient capital for said companies to reach key value inflection points," Ms Stead said.

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