New Pencarrow private equity fund

MEDIA RELEASE

Embargoed to 1am, 9 December 2011

New Pencarrow private equity fund targets expanding companies and buyouts

Pencarrow Private Equity is targeting expansion companies and management buyouts with a new private equity fund which today announced a first close of $77 million.

It is the fourth fund for Wellington-based Pencarrow, New Zealand’s longest established private equity firm.

Pencarrow Executive Director Nigel Bingham said the Pencarrow IV Fund has received commitments of $77 million from New Zealand institutional and private investors to reach its first close, exceeding the size of its previous $75 million fund raised in 2005. The fund will remain open to investors with the aim of raising between $100m and $150m before closing the fundraising next year.

“The focus of the Pencarrow IV Fund will be to invest in management buyouts and expansion capital opportunities among privately held companies in the mid-market segment in New Zealand,” Mr Bingham said.

“The fund will target investments in New Zealand companies with enterprise values primarily in the range of $20 million to $100 million. The target companies will have proven business models and profitable track records, and will usually require capital to achieve further growth, expand internationally, or assist with ownership succession.

“This is an ideal environment to be looking for new investment opportunities. There are a number of quality opportunities in the New Zealand market, especially in companies looking to expand. With ongoing volatility in Europe and the expectation of a slowdown in the rest of the world, the New Zealand private equity opportunity is an attractive one for institutions and private investors.

“The fundraising process will continue next year, and with only having two current portfolio investments remaining from our previous fund, our primary focus is now on investing the new fund for which we have already begun investigating new investment opportunities.”

Fundraising for the Pencarrow IV Fund began earlier this year following a cornerstone commitment of $30 million by the Guardians of New Zealand Superannuation.

“We have been delighted by the response of New Zealand investors to our offering, especially considering the current fund raising environment. We are now looking to target overseas investors, as well as further New Zealand investors, before a final close on the fund later in 2012.

“Pencarrow has an experienced team and a proven track record of successfully backing companies able to create value through growth and transformation. Despite the global financial crisis, our previous fund achieved a strong performance with very high levels of cash returns for investors.

“We are confident of similar success with the Pencarrow IV Fund given the current investment environment and opportunities,” Mr Bingham said.

ENDS

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