By YOKE HAR LEE
Auckland UniServices, the commercial arm of the University of Auckland, will start the country's first seed capital fund with about $15 million in the kitty.
After launching the New Zealand Seed Fund on Thursday, UniServices is to approach American and British investors.
It hopes they will match the sum raised locally by the time the fund reaches its second close, at the end of June. The fund will invest in revolutionary research originating from local universities and crown research institutes.
For the first time, they will be able to seek backing for their best research projects from a fund dedicated to commercialising their work.
It will also be the first New Zealand fund to invest in new research-oriented companies which have yet to develop products and markets.
UniServices' chief executive, Dr John Kernohan, says: "I think it is slowly dawning on New Zealand that the rest of the western world is moving ahead very fast while the bulk of New Zealand's activity is still commodities-based. There is a realisation now that we have to move on."
But the transition has been difficult because technology investment is not well-understood in New Zealand.
UniServices will earn its keep by contracting work, including research projects, and by licensing its intellectual property.
The seed fund will be managed by Ulysses Group, founded by Jerry Balter, an American investment banker with experience in raising money for US healthcare and medical companies.
Its advisory board will be chaired by Telecom chairman Roderick Deane.
For one of its first investments, the fund will be looking at staking NeuronZ, a company set up to research the central nervous system.
Dr Kernohan said other recipients the fund will consider include EPTTCO, a joint venture between UniServices and three British research companies working on cancer therapy, and a medical devices company.
A stark feature of investment in the seed stage of companies is that only a few make any money.
US experience shows that of every 15 companies attracting seed investment, only two to three will be highly successful, giving investors returns beyond their average investment profiles.
New fund aims to commercialise university research
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