YOUNG investors are turning away from the traditional investments and heading to private equity – one of the forms of venture capital.
Ord Minnett joint head of managed funds Chris Gorman said younger, tech-savvy investors were emerging as a new investment demographic in technology sector managed funds.
“We are on the threshold of a new wave of investors in private equity,” Mr Gorman said.
“Joining the traditional investors is a new group – younger investors who are more forgiving of the deflated tech sector bubble.
“Younger investors are used to home computer games, computer-driven workplaces and surfing the Internet.
“Technology is part of their mindset. Their expectation is the world around them will become faster and more technologically streamlined.
“They see the future as dependent on Internet developments and new technologies and are keen to be part of the financial expansion that will accompany it.”
Allen & Buckeridge Asset Management chief Roger Allen said younger investors were more aggressive.
“They are more interested in capital growth or gain than dividends,” Mr Allen said.
“They’ve grown up in the era of the Microsofts and the Dells.”
Mr Allen said 85 per cent of all US venture capital money went into the IT sector.
“There is no shortage of good investments out there,” he said.
Zernike Australia managing director Peter Why said younger investors were more attuned to the knowledge economy.
“They feel safer with it than older people who are not as technology literate,” Mr Why said.
Mr Gorman said the feedback he had received from distributors of a new venture capital technology fund suggested the new group of investors was keen to diversify their investments.
“They have experienced share market volatility, are now much more cautious about investing and are looking for investment opportunities with good long-term gains,” he said.
