NZ Super Fund, New Zealand’s sovereign wealth fund, announced that it will commit up to $70 million to the latest technology-focused fund of venture capital firm Movac.
The commitment is for the Movac Growth 6 Fund, an investment vehicle that seeks to back fast-growing, established technology companies in New Zealand, the wealth fund said in a statement on Monday. The fund seeks to make the first close of $100 million.
Movac is New Zealand’s most experienced venture capital firm. For more than 20 years, the firm has been backing some of the country’s most successful tech companies, with previous portfolio firms including Vend, Timely, Coretex, Unleashed Software, Aroa Biosurgery, PowerbyProxi, and Trade Me.
Existing portfolio companies include Dawn Aerospace, Tradify, Alimetry, Atomic.io, ZeroJet, KRY10, Tradify, Auror, and TracPlus.
From the latest fund, Movac intends to invest in eight to 12 companies and expects the bulk of the fund to be deployed over the next five years.
NZ Super Fund was the largest investor in Movac’s Funds IV and V and the two entities have developed a strong relationship after several years of working together, according to Del Hart, head of external investment and partnerships for the Guardians of New Zealand Superannuation, the manager of the NZ Super Fund.
Movac launched Fund 6 as New Zealand’s technology sector has proven its ability to produce internationally competitive companies of value and scale, said Movac partner Mark Vivian.
New Zealand’s tech sector grew nine times faster than the rest of the economy and generated $11.5 billion in export earnings, according to the latest Technology Investment Network’s report cited by Vivian.
NZ Super Fund said its commitment is 50% of the first close, which is about $100 million, with potential to increase to $70 million, depending on Movac’s fundraising.
The NZ Super Fund invests money on behalf of the New Zealand Government to help pay for the increased cost of universal pension entitlements in the future.
As of June 30, 2022, the NZ Super Fund assets under management stood at NZ$55.7 billion, down from approximately NZ$59 billion the previous year, its 2022 Annual Report released in October showed.
Since the Fund started investing in 2003, it has returned 9.65% per annum.