Here’s a nugget of news from yesterday’s AFR:
Three directors of the $2 billion Breakthrough Victoria fund are departing, amid calls for the “unnecessary” John Brumby-led venture capital player to be wound up, despite the state government insisting it is working well.
oh and:
The latest annual report shows the fund employs more than 50 staff, including former Victoria public servants and political staffers, at a cost of almost $9.9 million a year. The fund also spent more than $1.55 million on consultants, including PwC and EY, last financial year.
So let’s follow the $$$.
The Victorian government borrowed $2 billion to set up a venture fund staffed by 50 including “Victoria public servants and political staffers”. People with no venture fund experience basically.
According to reporting:
The fund invested just $73.7 million last year, but had $22 million in expenses, equivalent to 30 per cent of the invested capital – a rate venture capitalists warn is wasteful and uncommercial.
Apart from the folly of borrowing to invest, rather than give the money to people who actually know how to manage it, the Vic government set up its own plaything for it’s mates. It had $22 million of expenses, but lord knows in what the $73.7 million was invested and how it is performing (chances high, performance bad).
Who comes up with such stupid ideas - the borrow money to invest at a high cost. Oh that’s right. The Commonwealth Government which pioneered this folly through 7 Future Funds.
Underperforming and highly expensive Future Funds.
Pouring money down the toilet. Other people’s money.
https://www.futurefund.gov.au/-/media/2AADD51182EE46AC877814C58F6D358D.ashx
last page. 7 future funds. $270 billion. all borrowed.
7 future funds?
Unbelievable! :-(