The investment manager of the SA Venture Capital Fund has quit ahead of the appointment of a new management company

Despite her ongoing employment being mandated by an ongoing tender process, the manager of the SA Venture Capital Fund has quit.

Elaine Stead, formerly of Blue Sky and the SAVCF.

• Elaine Stead sues AFR for defamation
• Prizes, discounts, freebies: Check out the latest subscriber rewards

Elaine Stead has quit as manager of the $50 million South Australian Venture Capital Fund, despite her ongoing employment being mandated in an ongoing tender process.

The State Government is just weeks away from appointing a new overarching manager of the SAVCF, to replace Ms Stead’s former employer Blue Sky Alternative Investments, which failed last year.

The government called for expressions of interest for financial services companies to take over management of the fund last year, with the stipulation that they were willing to retain Ms Stead and her team.

Companies involved in the bidding process were asked to meet with Ms Stead, and employ her and her fellow investment manager if their bid was successful, tender documents said.

Ms Stead would not comment to The Advertiser. Her LinkedIn profile makes no mention of her previous role with the fund, and lists her main employment as managing director at Human VC - a venture fund she set up herself last year.

She also holds a number of board roles.

Treasurer Rob Lucas told The Advertiser last year that the SAVCF Management Committee, led by prominent businessman Raymond Spencer, believed the ongoing employment of Ms Stead was preferable.

Today he told The Advertiser in a statement that the Committee had advised him that Ms Stead’s decision to part ways with the fund had not distorted the tender process.

“I am advised the ability and willingness to retain Ms Stead was one of nine requirements that bidders were required to demonstrate in their application to manage the SAVCF,’’ he said.

“I am advised a number of applications were received from bidders that did not include Ms Stead as part of their proposed management team, with some of these applications progressing through to the short list and interview stage of the tender process.”

It is understood an interstate firm is currently the frontrunner to win the tender.

Mr Lucas said the identity of the currently identified preferred applicant could not be disclosed as the process was ongoing.

“A purchase recommendation will be submitted to the Chief Executive Officer, DTF (the Purchase Approval Delegate) following completion of a due diligence process to be undertaken on the preferred applicant. This due diligence process is nearing completion.

“Subject to successful due diligence on the preferred applicant and the purchase approval delegate approving the purchase recommendation, it is expected that the new SAVCF Manager will be appointed by the end of February 2020.’’

In December Ms Stead launched a defamation action against the Australian Financial Review and its columnist Joe Aston claiming a series of columns in the AFR made her look “stupid” and “reckless”.

The suit, filed interstate, alleges Fairfax Media (now Nine Entertainment Co.) imputed she was “a cretinously stupid person” and “wilfully destroyed the capital of business ventures with which she was associated causing enormous losses to unitholders’’.

That matter is ongoing and the AFR is yet to file a defence.

While the fund is put forward as a $50 million fund to invest in emerging SA tech companies, half of the money earmarked for the fund is for reinvestment in existing companies the fund has already backed, dropping the figure to just more than $24 million.

Of this, $6 million is already committed, meaning only $18 million is available for new investments.

The fund has, since it started in July 2017, has invested $6 million in just three companies, which the government says has leveraged a further $18.09 million from co-investors.

As revealed by The Advertiser last year, BSVC Pty Ltd - the Blue Sky subsidiary managing the fund - was to be paid management fees ranging from $915,751 to $1,045,568 per year for the first seven years of the 15 year contract, then $703,094 per year for the remainder.

On top of that, the independent committee chaired by Raymond Spencer and including ABC board member Donny Walford, is paid another $170,500 per year, based on publicly available contracts, which are valid until July 5, 2020.