With technology set to become a much larger part of the equities universe, super funds should be investing more in early-stage companies, says Right Click Capital.
Speaking to InvestorDaily, Right Click Capital founder Benjamin Chong said more super funds are neglecting early-stage technology investment.
First State Super has been one of the first super funds to move in the space, investing $110 million into Blackbird Ventures in September 2015 and $250 million into H2 Ventures in December 2015.
Right Click Capital is currently raising money for its Early Stage Venture Capital Limited Partnership (ESVCLP) fund, which takes advantage of government incentives for investment into start-up companies that came into place on 1 July 2016.
The ESVCLP structure gives investors a 10 per cent tax offset, and the investment is free of capital gains tax and income tax.
Mr Chong said the Right Click Capital Growth Fund, which is aiming raise $50 million, has mostly secured commitments from family offices and high-net-worth investors.
“I’d love to see more superannuation funds at the very least put their toe in the water and get some experience,” Mr Chong said.
“I recognise that for a lot of these superannuation funds there’s often a minimum size cheque that they need to write simply because of their size – they talk about ‘moving the needle’.
“But all the same, if technology is going to become an increasing part of our lives, it’s certainly going to become an increasing part of the equities universe.
“So why wouldn’t they want to spend a little bit of time and their investors’ money on having some exposure at an early stage?”
Eighty per cent of the funds raised for the Right Click Capital Growth Fund will be invested in Australian start-ups, as is required by the legislation, Mr Chong said.
The fund will invest in “anything tech”, with the major investments in software and transactional companies, he said.
“We’re also interested in the internet of things, as well as media, marketing and advertising technology. All of [Right Click’s] partners have experience in running or investing in those types of companies,” Mr Chong said.
The remaining 20 per cent will be invested in south-east Asia via Right Click Capital’s relationship with Wavemaker Partners and Golden Gate Ventures, he said.
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