Given feedback from the NSW Government that the concept of a regional innovation fund needed to be tested, the Board made a decision to pivot the Hunter 2050 program. A new project was concurrently formed called the Hunter Venture Fund (HVF). Local Government supports the innovative ecosystem to support future jobs unique to our region that builds on our competitive strengths.
This received significant support from innovation stakeholders across the region, including the University of Newcastle, private fund managers, angels and other investment industry actors.
The Hunter JO identified that there is a funding shortfall to support the evolution of the regional economy as the region experiences the downturn of its traditional industries and changing global energy markets. The regional economy needs to evolve to meet this challenge and the opportunities it presents.
To fill this investment shortfall, the Hunter JO began scoping and testing the HVF concept and the need for support of the regional innovation ecosystem. Significant inflow of capital investment is needed to drive the economic evolution challenges of the region.
Working through a project steering group of stakeholders, Henshall Capital was engaged to undertake the work of testing a fund with the investment and innovation ecosystem, and if needed, to articulate the fund’s structure, form and design. The Henshall Capital report was finalised and found:
- Significant gaps in the funding pipelines in seed and early-stage start-up funding
- A commensurate shortfall of a project pipeline in the region that would attract a larger flow of funds and investment to the region
- A need for an entity that governed the regionally based fund and the parameters and institutional/legal form of each. The entity would require $1.5m per year over 5 years from all levels of government, industry and innovation partners. The fund would begin at $25m and provide an expected (not guaranteed) return of 20% over 7 years.
- Recommendations including a process for progressing the development of the fund through engagement with partners and contributors
Funding Gaps in the Hunter
The HVF aligns with other regional and state efforts including the State Government’s initiative of establishing a Hunter Expert Panel that will oversee the allocation of funds across Regional NSW. The NSW Government has made a commitment that the Hunter JO will be represented on this panel to provide local, place-based advice on the allocation of funds.
The Hunter is in a special position to determine the flow of funds into coal dependent communities and, combined with our Hunter 2050 initiative, support for the regional innovation ecosystem. The Hunter Venture Fund will be key to ensuring that the region continues to adapt through a well-designed and activated process of economic evolution.