New NZ fund set up for agbiotech investment

A New Zealand-based venture capital fund of between NZ$75-100 million (AUD$70-94.5 million), with a focus on agricultural biotech has been established by the venture capital arm of the NZ government and private collaborators Direct Capital and crown research institute AgResearch.

According to Franceska Banga, the chief executive of the NZ government's Venture Investment Fund (VIF), the new Life Sciences Venture Fund is making good progress, with the first close expected before the end of the calendar year. "The government puts $1 for every $2 of private sector investment [into the fund], so as soon as they have raised the private matching capital, we would expect the fund to be up and running," she said.

The new fund's executive chairman, Bill Kermode, said he had received a good reception from private investors since making the first formal approaches in April.

"But they're not writing out the cheques quickly," he said. "We're talking to financial investors, both institutional and individuals, and to corporate and industry groups, primarily food and agriculture groups, both in Australasia and in Europe, the US and Asia."

Kermode, who is also a director of Direct Capital, acknowledged that the Life Sciences Fund could overlap with other VC funds, such as the Burrill Australia Life Science fund, that are also chasing support for Australasian biotechnology from a limited pool of investors.

"Normally, raising funds of this sort of a size takes a couple of years," he said. "There are not a lot of food and agriculture focussed funds around."

Auckland-based Direct Capital currently manages three Australasian VC funds, including a telecommunications technology fund and a private equity fund.