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Fund Signals Confidence In Heartland New Zealand

Media Release
17 August 2008


Fund Signals Confidence In Heartland New Zealand

Business confidence may be plummeting in the cities but a group of successful Hamilton businessmen has given provincial New Zealand a strong vote of confidence with the launch of a new private equity fund targeting investment opportunities in the country’s heartland.

The new fund – Central Capital Regional Fund LP - seeks to raise $50 million within the next 12 months to invest principally in high growth companies based in the Central North Island, outside of metropolitan Auckland and Wellington.

The fund is the brainchild of well-known Hamilton businessmen Gary Mollard and John Birch.

Mr Birch says the pair established the fund to fill a gap they identified in the market for an early to late stage investor in growth companies that service the primary sector and other heartland industries.

“The primary sector is going through a growth phase. However, many of the companies servicing this sector are now financially challenged to keep up with their customers and fund their own growth. Additionally, many owners require additional strategic or operational skills to deliver on the potential available to them,” he explains.

The co-founders believe Central Capital is the first fund in New Zealand focussed specifically on investing in the country’s rural core.

Both Mr Mollard and Mr Birch have in-depth knowledge of the rural services industry. Mr Mollard is a former managing director and current director of NDA Engineering, while Mr Birch is a former shareholder and director of McClunie Birch and chairman and director of the Waikato Innovation Park.

Mr Mollard says the focus on New Zealand’s rural heartland is an opportunity overlooked by most traditional investors.

“The central North Island has a number of strong, attractive businesses across a range of industries; however they have been under the radar to Wellington, Auckland and Australian-based private equity firms.”

“Central Capital has assembled a group of highly experienced business people who are seeking to capitalise on these previously overlooked opportunities. Each of us has well-honed investment decision making and operational skills. We’ll pick our investments carefully then work closely with our portfolio companies to ensure the required growth is achieved,” outlines Mr Mollard.

The fund is now being raised from high net worth individuals and institutions, with a minimum investment required of $500,000. Messrs Mollard and Birch will themselves be substantial investors in the Central Capital Regional Fund.

The fund has adopted a Limited Partnership (LP) structure and aims to raise $25 million by early October, rising to a maximum of $50 million within the next 12 months. It is expected the fund will make eight to twelve investments over the next 3 to 5 years.

Former banking executive Rory MacGillycuddy has been appointed as the company’s CEO. He says the Central Capital Regional Fund is unique in that it will join investees and investors who are passionate about the primary sector and regional industries.

“Central Capital is specifically targeting farmers and rural executives or organisations interested in investing in high growth businesses that are right in their own backyard, so to speak.

“This means investors get the advantage of backing companies whose operations, products and services they fully understand. Plus, by putting money into the fund, they receive the added benefit of an equally-passionate, proven team of operators working on their behalf to maximise their investment,” explains Mr MacGillycuddy.

In addition to Messrs Mollard and Birch, the Investment Committee includes two independent members, Rodger Fisher and Alton Jamieson.

Mr Fisher, previous Managing Director of Owens Group, is now a consultant and professional director. Rodger is chairman of WEL Networks Limited, director of Lyttleton Port Company Limited and Tenon Limited (formerly Fletcher Forests Limited).

Mr Jamieson is former Managing Director of Waste Management NZ Limited where in various senior roles he oversaw approximately 50 acquisitions. He is a director of Smart Environmental Limited and chairman of NZAX listed The New Zealand Wine Company.

For more information about the Central Capital Regional Fund, visit www.centralcapital.co.nz.

ends

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