The Victorian government will open a $250 million business growth fund to help small and medium businesses in the state deal with the economic impacts of the COVID-19 pandemic.
Announced Monday, the program will see the superannuation industry make investments in Victorian firms.
First State Super will be the primary partner for the fund, taking out equity stakes in eligible firms through the program, Treasurer Tim Pallas said.
“This is a Victorian-first program that finds a new way of backing our local businesses to become bigger and better. We know access to capital is often a handbrake on growth — we’re fixing that,” Pallas said in a statement.
“As we continue to recover from this crisis, we’ll continue to pursue more opportunities to work closely with the private sector to grow the economy.”
The fund will target SME businesses with high growth potential, similar to the federal government’s existing $1 billion growth fund. This means a small number of businesses are expected to benefit from the program.
Investment management firm Roc Partners has been brought in to manage the fund and will make all investment decisions based on “commercial assessments about potential growth”.
The Victorian government says it will have no involvement in investment decisions, but will agree to an investment mandate with First State Super that will guide how Roc Partners makes decisions.
Equity stakes and debt finance arrangements will be offered to eligible firms.
Eligibility criteria include:
- Annual revenue of between $5 million and $100 million;
- No more than $250 million in assets; and
- Positive cashflow, or cashflow that is expected to be positive during the investment.
Interested businesses and their investors have been advised to contact Roc Partners through its website.