(Bloomberg) -- A former Macquarie Group Ltd. banker has been named chief executive officer of Australia’s new A$15 billion ($10 billion) National Reconstruction Fund, a Labor government initiative designed to revive manufacturing and associated industries.
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Ivan Power, a former executive director with the financial services group, will take up his post in mid-February. The NRF was a key plank of Labor’s 2022 election commitment to revive domestic output following pandemic-era supply chain disruptions and to hedge against intensifying geopolitical risks.
Power, in an interview, said he hoped to announce the first investments by year’s end, adding there had already been over 160 expressions of interest.
“We’ve got to balance that urgency and that drive against the fact that we are investing taxpayers’ money,” he said in Canberra on Wednesday. “This is not a grant-making organization. We’re making investments.”
The seven priority areas for the fund to invest in include green energy technology, medical science and defense capability, as part of an overall push to “diversify and transform Australia’s industry and economy.”
Australian manufacturing was largely hollowed out during a mining investment boom about 15 years ago that sent the currency soaring above parity with the dollar, rendering local firms uncompetitive. While political leaders were largely sanguine about the loss then, the hardening US-China contest has made trading with potential security rivals riskier and prompted a renewed focus on local production among developed nations.
The NRF is intended to grow Australia’s “industrial muscle,” Industry Minister Ed Husic said in a statement on Thursday. Husic added that Power’s appointment brought “extensive experience in financial markets and global investment” to the role.
Power said under his leadership the NRF would be looking to partner with other financial institutions to extend investment opportunities available to the fund as well as helping alleviate risk.
“Australian financing capability is world class,” he said. “We’re not going to be an organization that sits here and thinks that we have the solution to all of these problems. We are an organization that is co-investment, that is a partnership organization.”
The announcement comes amid growing difficulties in Australia’s green minerals sector, including asset writedowns and mine closures affecting companies that are focused on lithium and nickel.
Power said while the NRF needed to be “very careful about volatility,” he wanted the fund to also keep its investments looking at the longer-term potential. “It’s very clear in our mandate that we’ve got to be thinking about things in the medium-term,” he said.
(Updates with comment from minister.)
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