A Gold Coast-based niche funds manager has established an investment vehicle to raise $500 million from APRA superannuation funds to assist Queensland SMEs affected by floods and Cyclone Yasi.
Investors Exchange has registered the Investors Exchange Business Restart Fund with the Australian Securities and Exchange Commission to raise the funds.
According to Investors Exchange chief executive Glenn Griffin, the company is seeking contributions of $25 million from 20 of Australia’s largest super funds.
Griffin, who has appealed to 50 of the country’s top super funds, says he is awaiting their responses and is confident of the outcome.
“I wouldn’t have spent a whole bunch of money if I didn’t think it was feasible. Can I guarantee the super funds will subscribe [to the fund]? No, I can’t,” he says.
“The 25 million dollar investment would represent less than 0.01% of the current assets under management and that’s why I expect all of the $500 million to be raised by the closing date of March 31.”
“We only need one superannuation fund to make an initial investment of $25 million and we can commence reviewing equity applications from small business.”
Griffin says businesses that have been directly or indirectly affected by the floods or cyclone are eligible to apply, but they must have been in operation for at least four years.
“We can’t expect super funds to invest in a scheme where a business may go broke; we do need to have perimeters,” he says.
“Businesses do not need to be directly affected by the flood but if they can demonstrate their business has suffered, as a result of some part of their supply chain being affected, they would meet the criteria required for assessment to be made on any recapitalisation request.”
According to Griffin, Queensland SMEs are the “forgotten victims” in the wake of the disasters, despite being the lifeblood of many of the affected communities.
“There has been lots of support offered to individuals affected by the recent floods… and the cyclone,” he says.
“But apart from the Federal Government offering subsidised loans to small business, there has been little support offered to assist business in the recovery process.”
Griffin was quick to point out that the fund is an ASIC-registered scheme with an independent investment committee in addition to independent custodians to hold the funds.
Any successful business application will enter into a shareholders’ agreement to work on proper returns and exit strategies tailored to each business.
Griffin says the concept is a first for Australia, but already has plans to establish a similar scheme to assist flood-stricken businesses in Victoria within the next 10 days.