Former New South Wales premier Mike Baird has been appointed to chair the federal government’s Business Growth Fund (BGF), replacing former Tasmanian premier Will Hodgman.
Treasurer Josh Frydenberg announced Baird’s appointment to oversee the $540 million fund this morning, seven months after Hodgman’s appointment in April.
Formally established in October, the BGF brings together government and private sector investment to offer capital to high-potential SMEs and startups.
The government first announced the fund in 2018, and has contributed an initial $100 million to seed the fund.
This funding has been matched by the four major banks, with ANZ, Commonwealth Bank, National Australia Bank and Westpac each committing $100 million.
Macquarie and HSBC will also each invest $20 million in the BGF, which will allow established SMEs with annual revenue between $2 million and $100 million to apply for long-term equity investment of between $5 million and $15 million.
The long-term goal is to grow the fund to a value of $1 billion as it matures.
Baird served as NSW premier between 2014 and 2017, and has previously held senior roles in the banking sector, including at NAB, where he left in March this year.
He is also the chief executive of aged care provider Hammondcare and on the board of Cricket Australia.
Former NAB executive Anthony Healy was appointed as chief executive of the BGF in October, and has said he expects the fund will make its first investments in the first quarter of 2021.
Funding will be provided to SMEs over five-year periods, with the BGF to take minority stakes in these businesses of between 10% and 40%.
To access investment, businesses will need to be able to demonstrate three years of revenue growth and profitability, although the government said the effects of COVID-19 will be taken into consideration.