Arthur Street Capital Management Pty Ltd is a private company incorporated in Australia on 17 December 2018. It was established by a group of leading investment professionals, and offers venture capital fund to investors. The fund’s objectives are to seek to invest in firms that have high-risk/high-return profiles, based on a company‘s size, assets and stage of product development and also to create and add exceptional value to investors’ wealth. With extensive collective experience and expertise gained in both the corporate and financial worlds, Arthur Street Capital Management is able to offer its clients thought leadership and original investment ideas that set Arthur Street apart from average investment house.
What is Venture Capital
Venture capital refers to investment in early stage companies, from the provision of 'seed capital' through to 'early stage expansion capital'. By their nature, individual venture capital investments are regarded as higher risk, however they provide investors with the potential to generate very high returns that are not available in many other asset classes.
Venture Capital in Australia
Venture capital in Australia is under-developed relative to other developed economies around the world. Austrade estimated that in 2008 approximately $2.6 billion had been invested in venture capital, representing less than 0.2% of the $1.7 trillion in funds under management in Australia. Similarly, venture capital investments represent a low proportion of Australia’s GDP relative to other countries around the world. Venture capital is playing an important role in this economic transformation – providing the capital and expertise to ensure Australian companies reach their potential, not just locally, but also on the global stage.
Why Arthur Street
Potential for large capital returns: Arthur Street will give investors the potential for capital gains that are difficult to achieve in most other investment classes. While venture capital is generally considered to be a higher risk asset class, these risks are partially mitigated by Arthur Street investing in a diverse portfolio.
Arthur Street will undertake roadshows to sophisticated investors as well as market to Arthur Street Capital Management‘s potential clients who already expressed interest to invest. Arthur Street has initial discussions with potential clients who express interest to invest, including a number of high net worth individuals and family offices. The management team of Arthur Street has very solid relationships with the potential clients.
Targeted Average Investment Amounts
The targeted average investment amount (per investor) is $500,000, and the Fund intends to raise minimum $10 million in the first year. Each investor is expected to invest more than $500,000.
Target Investor Profile
The target investors of the Fund are high net wealth investors and significant investor visa (SIV) investors, as well as wholesale clients. Wholesale clients include both high net worth individuals and institutional investors. The Fund will specifically target wholesale clients located in Australia and overseas. The targeted onshore clients will typically be those qualified under the SIV programs and high net worth investors.
1. Target IRR: 20% p.a. (net of fees) 2. Total capital raising: Minimum of $10 million, with the ability to raise additional amounts 3. Minimum investment: $500,000 and in multiples of $10,000 thereafter (30% payable up front) 4. Minimum investment term: 5 years 5. First close date: The earlier of: $10 million in capital commitments being raised; and 30 April 2020. These dates are indicative only and are subject to change. Prospective investors are encouraged to submit their Application Form as soon as possible after the Offer opens.)
While the focus of the Fund is to create a balanced portfolio of investments, the Fund will not invest in an Investment Entity whose predominant activity is: (a) property development or land ownership; (b) insurance; (c) construction; (d) making investments directed at deriving passive income; (e) mining or exploration; (f) armaments; or (g) gaming
The Fund will focus on investing in Australian based businesses. At the time of investment and for at least the following 12 months, Investment Entities will be: (a) headquartered in Australia; (b) have at least 50% of their assets (by value) in Australia; and (c) have at least 50% of their staff (by number) located in Australia. The Fund is able to invest up to 20% of Capital Commitments into overseas investments that otherwise meet the investment criteria of the Fund (as allowed under guidelines that govern VCLPs).
PORTFOLIO INVESTMENT & SIZE
The size of the Fund will initially be $10 million, with the ability to grow depending on the level of investor demand. The target investment size to be made into each Investment Entity by the Fund will be between $0.20 million - $5 million. While follow-on funding may be provided to Investment Entities, no investment will represent more than 30% of the Fund’s committed capital.
Stage of Development
Stage of Development
Stage of Development
Stage of Development
The Fund has the flexibility to make investments across any of these stages of development, however the focus of the Fund will be on investing in businesses in the 'Start Up/late VC' stage. The Manager expects that 50% - 60% of Capital Commitments will be invested in businesses in the 'Start Up/late VC' stage of development.
The Arthur Street Fund (Fund) will invest in a balanced portfolio of venture capital opportunities. Typically, these opportunities have most or all of the following characteristics: (a) rapidly growing Australian businesses in the ‘early expansion’ stage of development; (b) have management teams with proven track records; (c) have an enterprise value of <$250 million.
In exchange for its initial capital investment, the Fund will seek an initial equity stake of between 5% - 50% in each Investment Entity. The remaining 50% - 95% of the equity in each Investment Entity will be held by that entity's existing investors, or by co-investors in the capital raising round in which the Fund is participating.
For most investments, the Manager will require that it has the right to appoint at least one director to the board (or other governing body) of each Investment Entity as a condition of making its initial investment.
CAPITAL RAISING EXPERIENCE
The directors of Arthur Street have extensive skills and experiences in providing product advice and management services to wholesale clients. Arthur Street Capital Management and its key personnel have significant capital raising experience. In particular, Arthur Street Capital Management key personnel previously raised multi-million dollars in their own business enterprises. The key personnel within Arthur Street Capital Management have strong and wide investor networks. Further information and details about the skills and experience of Angel Wings Venture Capital's key personnel is set out below.