Big four-backed growth fund hunts for cutting-edge investment ideas
Fast-growing small and medium businesses requiring more capital to grow should consider partnering with a $540 million private equity-style fund backed by banks and the federal government, its chief executive says.
The Australian Business Growth Fund chief Anthony Healy said the fund was looking to inject more capital into a wide range of sectors including technology, cybersecurity, clean energy, advanced manufacturing and defence important to Australia’s economic future.
The public-private partnership fund became operational in 2021, after the then treasurer Josh Frydenberg pressed banks to chip in seed capital.
Anthony Healy, CEO of the Australian Business Growth Fund, in Melbourne. Arsineh Houspian
The Australian Business Growth Fund invests between $5 million and $15 million into SME businesses, for a minority stake of up to 49 per cent. The fund does not loan money like banks, but rather becomes a minority equity partner in fast-growing and disruptive SMEs for up to 10 years.
“We want to be investing innovators and disruptors,” Mr Healy said. “We want to be in sectors and businesses that are adding value to the future of Australia.”
The mid-market fund is trying to fill a void often ignored by private equity funds which tend to seek larger investments. Mr Healy, a former National Australia Bank and ANZ business banker, said the public-private vehicle was an alternative to debt financing by banks.
“Business often estimates its growth potential from how much money banks will lend them,” he said. “Banks can only lend so much.”
The fund has so far closed nine deals including partnering last month with skincare manufacturer, distributor and retailer, Inskin Cosmedics.
The fund’s portfolio also includes investments in
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