Kapunda Ventures Fund I is structured to align incentives and to provide LPs with the opportunity to deploy additional capital on more favourable terms.
The fund's tiered carry structure is designed to align GP incentives with LP returns: carry only accrues above an 8% hurdle rate, and the rate increases as returns improve. There is a full catch-up provision once the hurdle is cleared.
| Return Scenario | Net IRR | Carried Interest Rate |
|---|---|---|
| Below Hurdle | < 8% IRR | 0% |
| Base Return | 8%–25% IRR | 20% |
| Outperformance | > 25% IRR | 25% |
Subject to availability, LPs can deploy additional capital alongside the fund at the same price and on the same terms as the core fund. This enables LPs to meaningfully increase their ownership in individual portfolio companies they have conviction in, without paying full fund economics on that additional capital.
Co-investment is via sidecar vehicle, which simplifies administration and ensures that co-investing LPs benefit from the same legal protections, governance rights and information flows as the core fund position.
Kapunda’s nil reserve policy means all pro-rata rights in portfolio companies are passed through to LPs. This creates a significant pool of direct investment opportunities for LPs in subsequent rounds.
These pro-rata rights enable LPs to increase exposure to high-performing companies whose subsequent funding rounds are often over-subscribed.
Kapunda intends to actively seek liquidity through secondary sales to growth funds in parallel with later-stage funding rounds and LPs will have right of first refusal on these share sales, providing another avenue through which LPs can increase their direct ownership in portfolio companies before those companies reach IPO or acquisition.
For institutional LPs, whose minimum cheque sizes make seed-stage direct investments impractical, Kapunda is designed to function as a best entry point to investing in Australian hard-tech. LPs will gain insight into Australia’s most promising startups across energy, industrials and agriculture and the access that enables them to make informed investment decisions at later stages.
The ESVCLP structure provides tax concessions for eligible investors. Limited partners are generally exempt from tax on their share of the partnership’s income and capital gains from eligible venture capital investments, and may be entitled to a 10% non-refundable carry-forward tax offset on capital contributed. These concessions depend on the fund maintaining its ESVCLP status and on investments qualifying as eligible venture capital investments. LPs should seek independent tax advice to confirm their eligibility and the tax treatment that applies to their circumstances.
This document is for informational purposes only and does not constitute financial product advice. It has been prepared for sophisticated wholesale investors only. The terms described herein are indicative and subject to the final fund documents, which will govern in all respects. All co-investment rights are subject to availability, with the core fund taking priority. Prospective investors should seek independent legal, financial and tax advice before making any investment decision.