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Venture Capital Is the New Buzz Word for Australia Pension Funds

  • Super funds helped VC firms raise record A$1.3 billion in 2018
  • Venture capital is higher risk but can offer superior returns
Retirees As U.S. Rule To Protect Retirement Savers Vanishes
Photographer: David Paul Morris/Bloomberg

When Julio Ribeiro began tapping venture capital firms last year for his Sydney-based medical technology startup, he feared it would be a hard slog. Instead, Inventia raised A$10 million ($6.8 million) in a matter of months and ended up turning some U.S. investors away.

The strong interest came from an unlikely quarter -- venture capital firms backed by local pension funds. The typically risk-adverse money managers are embracing the sector as they diversify investments to generate higher returns. Funds including Host-Plus Pty and Telstra Super Pty helped VC firms raise a record A$1.3 billion last year, up from A$200 million in 2014 before pension interest took off, Australian Investment Council data show.