Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Hansard source

The Business Growth Fund is designed to fill a specific gap in Australia's equity finance market. As I said earlier, there were separate reports from the RBA and Australian Small Business and Family Enterprise Ombudsman that identified that specific gap in the long-term patient equity capital market. The gap is not directly addressed by venture capital and neither is it addressed by private equity. That patient capital can provide entrepreneurs with the finance that is needed to expand without relinquishing control of their businesses. Equivalent funds have been established in the UK and in Canada, and they have shown that there is in fact a need for this type of finance and that patient capital investment can be very profitable for investors while supporting new businesses. It is important to note that there are around 40,000 SMEs in the target market for the BGF and that, when fully matured, the BGF will invest in around 30 to 50 SMEs per year. So it will not compete with private equity or venture capital.