Hon Steven Joyce
Minister for Economic Development
27 February 2013 Media Statement

Govt provides $60m underwrite for NZVIF

Minister for Economic Development Steven Joyce today announced a further $60 million underwrite for the New Zealand Venture Investment Fund’s programme to encourage more private investment into new venture capital funds.

“Capital markets are the growth engine for the economy but some parts can be strengthened. There is a role for Government to partner with private investors in developing the venture capital part of our capital markets, as is the case in the United States and other economies with strong innovation sectors,” Mr Joyce says.

“Raising the level of venture capital investment into innovative companies is a focus of the Government’s Business Growth Agenda and is highlighted in the Building Capital Markets progress report. The $60 million underwrite of the venture capital programme – to which the Government has already allocated $160 million and a previous $40 million underwrite – allows NZVIF to continue to commit to new venture capital funds, which will invest in technology companies.”

“The underwrite facility is a contingent liability rather than an upfront sum. It provides the flexibility so that NZVIF can continue to make commitments into new venture capital funds and then use future cash flows from existing investments to meet those commitments.

“The past 12 months has seen two new funds established and begin investing, and NZVIF expects to see another two to three funds raising funds over the next three to four years. The underwrite will assist this renewed activity in venture capital. It will also support new investment through the $200 million Co-Fund established between NZVIF and the National Development Fund of Taiwan.

“NZVIF’s venture capital programme sees it partnering with private investors to invest in venture capital funds. Through NZVIF, the Government invests relatively small sums, on fully commercial terms, which spurs considerably more private investment.

“NZVIF has invested $117 million into 126 companies – including Orion Health, SLI Systems, PowerbyProxi, Booktrack, BioVittoria and Zephyr Technology – which have gone on to raise total investment capital of $700 million. They have also earned revenues of $1.25 billion, including export earnings of $945 million.”

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Arguably Reassuring: Inspector-General Finds GCSB "Arguably" Legal

Of the 88 individuals:

• 15 cases involving 22 individuals did not have any information intercepted by GCSB.

• another four cases involving five individuals were the subjects of a New Zealand Security Intelligence Service warrant and the GCSB assisted in the execution of the warrants. The Inspector-General is of the view that there were arguably no breaches and the law is unclear.

• the Bureau only provided technical assistance which did not involve interception of communications, involving three of the individuals, so no breach occurred.

• the remaining cases involved the collection of metadata, and the Inspector-General formed the view that there had arguably been no breach, noting once again that the law is unclear.
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