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This week saw the annual AVCAL (Australian Private Equity & Venture Capital Association Limited) conference on the Gold Coast.  As part of this event discussion were held between the industry association management and members of the venture capital industry.

From that meeting came a call to force super funds to make allocations to the venture capital industry as reported in The Australian and Business Spectator.

As I commented on the Business Spectator site I think Richard’s comment (September 19, 1.13pm) is typical of the reaction this proposal would get and therefore it would be politically stillborn. However, venture capital (or more accurately venture funding) has, or should have, outcomes unique for an investment class, a perpetual cycle of industry and business renewal (AVCAL wants super funds forced into venture capital, September 19).

But while that is about significant indirect economic benefit to all Australians it has to be paid for and as a direct investor (i.e. through our super contributions) the asset class is a terrible performer, even if it had no risk it would be a terrible performer over the last 20 years.

The problem is a lack of expertise and a lack of review and analysis to find the real drivers to get this asset class performing at an appropriate Risk Vs Reward level. I am researching this area through Bond University and hope to announce a macroeconomic Sustainable Venture Capital Model in due course.

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