The Australian Business Growth Fund has doubled the amount it can initially invest in individual businesses, increasing its maximum first investment from $15 million to $30 million.
The government-backed fund has also raised the total amount it can invest in a single company to $50 million when follow-on funding is included.
The changes significantly expand the amount of capital available to growing Australian small and medium-sized businesses through the fund and are intended to give ABGF greater flexibility when backing companies at different stages of expansion.
The fund has also broadened its investment mandate to allow it to take a majority stake in a company where an owner wants to reduce their shareholding.
Previously, ABGF had generally focused on taking minority positions, allowing founders and business owners to retain control while accessing growth capital.
CEO Anthony Healy said the expanded mandate would allow the fund to support businesses that previously fell outside its investment criteria because they required larger investments or different ownership structures.
“These changes mean bigger backing, more flexibility and better access to capital for growth-ready Australian SMEs,” Healy said.
Filling a Gap in SME Funding
ABGF was established in 2020 with an initial $540 million commitment through a public-private partnership between the Australian Federal Government and six major banks.
Its purpose is to provide long-term growth capital to established Australian SMEs that may be too developed for traditional venture capital but too small for larger private equity transactions.
The fund currently targets Australian-headquartered businesses with annual turnover between $2 million and $100 million and at least three years of profitable operations.
That places ABGF in a segment of the market where access to substantial equity investment can sometimes be limited.
The fund has previously described Australia’s growth economy as including around 164,000 small and medium-sized businesses with the potential to contribute significantly to economic growth and sovereign capability.
By increasing its initial investment ceiling to $30 million, ABGF will now be able to participate in larger funding requirements without businesses necessarily having to look elsewhere for additional capital.
New Mandate Offers Greater Flexibility
The ability to take majority ownership represents another significant change.
ABGF’s model has traditionally centred around providing growth capital without requiring founders to surrender control of their businesses.
Under the expanded mandate, majority investments will now be possible where existing owners actively want to reduce their holdings.
That could make the fund relevant to a wider group of established businesses, including founders seeking partial exits, succession options or additional capital while transitioning ownership.
Healy said ABGF’s underlying purpose remained unchanged despite the broader investment criteria.
The fund would continue to focus on supporting Australian-owned businesses with growth potential while giving management teams greater flexibility over how investments are structured.
Griffin Industrial Group Becomes Latest Investment
The expanded mandate comes as ABGF adds defence services business Griffin Industrial Group to its portfolio.
The size of the investment has not been disclosed beyond being described as a multimillion-dollar transaction.
Griffin Industrial Group provides shipbuilding, maintenance and marine infrastructure services and operates from Australia’s four major naval homeports in Henderson, Sydney, Darwin and Cairns.
The 12-year-old company employs more than 200 people and is expected to use the investment to expand its operations as demand for domestic defence capability increases.
Healy described Griffin as the type of nationally significant Australian business the fund was designed to support, highlighting its role in developing local skills and sovereign industrial capacity.
ABGF’s existing portfolio spans sectors including technology, manufacturing, recycling, healthcare and logistics.
The fund has previously invested in businesses including 3ME Technology, Capsifi, HUBBED and Solbari.
The latest changes give ABGF considerably more room to support larger SMEs as they scale.
For Australian business owners, the doubling of the initial investment limit also creates another potential source of substantial growth capital at a point where companies have often outgrown smaller funding options but may not yet be suited to traditional private equity.
