Economic Development Minister David Parker is developing plans which could see the $40 billion New Zealand Super Fund pushed into venture capital.
Sources say Parker has requested officials draw up a Cabinet paper on whether a portion of the Government’s future contributions to the fund – believed to be more than $200 million – should be allocated into a fund for early stage companies.
Often referred to as angel investment or venture capital, the New Zealand Government is already active in what is a generally high-risk investment area, through the Venture Investment Fund (NZVIF), which co-invests alongside private investors.
Should the idea be progressed, the move would see the Super Fund having a specific investment mandate imposed on it for the first time. The fund is said to be pushing back against the idea.
This is a terrible idea.
The idea of the NZ Super Fund is to provide for the future costs of NZ Superannuation. It is meant to have an independent board who focus on getting the highest return on capital to boost the fund.
Parker wants to direct them into highly risky investments. The Government already had an awful track record of picking winners here, and Parker wants to gamble the NZ Super Fund on more of them.