Investment firm NextGen Funds launches AI fund for startups
Australian investment company NextGen Funds Management has announced the launch of the country’s first AI (Artificial Intelligence) fund. The name of the fund is NextGen Artificial Technology Fund. This fund will be for sophisticated investors who wish to invest in a diverse mix of debt-equity in AI-tech ventures ranging from startup to pre-IPO phases. The investment firm says the fund will include a mix of innovation-in-order and fully developed to balance the risk.
About NextGen Artificial Technology Fund
The NextGen Artificial Technology Fund is designed by the Melbourne-based investment firm with a 3-5 year investment term in mind along with a minimum initial investment of $100,000. After this minimum initial investment, NextGen investors may invest more funds in multiples of $50,000. The company informs that a minimum balance of $100,000 needs to be maintained at all times.
Investments by the firm will be made in targeted opportunities through individually structured arrangements which may include private equity and convertible notes along with debt funding such as secured loans.
The NextGen Artificial Technology Fund has no upper or lower limit on the deal size. An unguaranteed income yield objective of this Fund is 5% per year with a total return objective of 10-12% per year on an internal RoR (rate of return), post fees and costs and pre-tax.
Fees are 1.65% per annum which is exclusive of GST of Funds Under Management. Additionally, a 20% performance fee is charged above the Benchmark return of 7% which is inclusive of pre-tax performance after management fees and other operating costs have been deducted.
More on the AI investment fund
Head of Distribution NextGen Funds Management, Samuel Mullavey says the key investment areas of the Fund are where the AI adoption will provide the greatest benefits environmentally, economically and socially. The sectors they are looking out for are infrastructure and transport, health and wellbeing, cybersecurity, environment and natural resources, financial services and smart cities, says Mullavey.
NextGen believes Artificial Intelligence will be the defining technology of our times. AI is now set for accelerated growth and demand and NextGen has positioned this Fund to take complete advantage of the exciting opportunities for investment unavailable to public markets, Mullavey adds. The Fund also aims to deliver appropriate risk-adjusted returns to unitholders via a combination of income and capital growth generated from investments in the rapidly expanding AI tech sector, he concludes.
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