diff --git a/contracts/VaultFactory.vy b/contracts/VaultFactory.vy
index 83eaec78..2ea35ea8 100644
--- a/contracts/VaultFactory.vy
+++ b/contracts/VaultFactory.vy
@@ -29,7 +29,6 @@
     The protocol fees will be sent to the designated fee_recipient and
     then (X - protocol_fees) will be sent to the vault/strategy specific
     fee recipient.
-
 """
 
 from vyper.interfaces import ERC20
@@ -96,10 +95,10 @@ custom_protocol_fee: public(HashMap[address, uint16])
 use_custom_protocol_fee: public(HashMap[address, bool])
 
 @external
-def __init__(name: String[64], vault_blueprint: address):
+def __init__(name: String[64], vault_blueprint: address, governance: address):
     self.name = name
     VAULT_BLUEPRINT = vault_blueprint
-    self.governance = msg.sender
+    self.governance = governance
 
 @external
 def deploy_new_vault(
diff --git a/tests/conftest.py b/tests/conftest.py
index bb3e0f5c..d1537f8c 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -159,7 +159,10 @@ def vault_blueprint(project, gov):
 @pytest.fixture(scope="session")
 def vault_factory(project, gov, vault_blueprint):
     return gov.deploy(
-        project.VaultFactory, "Vault V3 Factory 3.0.1-beta", vault_blueprint
+        project.VaultFactory,
+        "Vault V3 Factory 3.0.1-beta",
+        vault_blueprint,
+        gov.address,
     )