Venture capital bounces back
Venture capital has attracted significant investor attention and stands to become a viable alternative asset class as inflows continue according to venture capital firm Allen and Buckeridge.
Director Roger Buckeridge says local investors have continued to be supportive of venture capital as an investment class and the amount of deals receiving funding has remained strong.
"The quality of the investments is still high and the quantity levels are strong with investors making commitments of $100 million each year," Buckeridge says.
"There is room for more money to flow into the technology area but the industry is half way through a cycle and the next 12-24 months will be an interesting time for success."
However, fellow director Roger Allen says venture capital is still at a critical phase in its development as an investment class.
"It is still at an early stage and in the wake of the technology wreck investors have to avoid throwing out the baby with the bath water and focus on what venture capital is. It is not about a quick investment," Allen says.
"It is important that venture capital returns five per cent more than comparable asset classes but over longer terms such as 10 years."
Allen and Buckeridge general partner Simon Anderson says in the US venture capital has returned to its roots but investors are looking for tangible benefits.
According to Anderson the last two years of endless funding of technology companies on the assumption that other investors would also pour in money has ended.
Rather, investors are looking at traditional styles of investment where a company has intellectual property which is protected and can be exploited on a global level.
He says investors are still looking for good ideas but companies now need to show milestones in their growth for continued support.
AUTHOR
Jason Spits
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
