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New Record Highs For NZ Activity Across Private Equity And Venture-backed Companies

  • Total investment and divestment activity across all investment stages increased to NZ$2.2b, from NZ$1.7b in 2018.
  • Mid-market investment increased to NZ$399m from NZ$245m in 2018.
  • The average investment transaction value for mid-market was NZ$13.8, slightly increased from NZ$12.9m in 2018.
  • Early-stage venture investment was NZ$112m across 46 transactions.
  • Early-stage venture divestment including seven transactions with total value of NZ$6.6m.

The New Zealand Private Capital Monitor, released today, highlights a strong investment in New Zealand businesses in 2019.

EY partner Brad Wheeler, said “Despite the current Covid-19 position, the economic outlook gives the private capital community the increased opportunity to act as the capital partner to help accelerate the ambition of many NZ businesses again.”

Mid-market transactions in 2019 included investments by New Zealand domiciled funds including Pioneer Capital, Pencarrow Private Equity, Direct Capital, Oriens Capital and Milford Private Equity.

Andrew Frankham, the chair of the New Zealand Private Capital Association said, “The Mid-Market sector continues to be a strong performer with more than $2.2 billion invested in the last decade and $1.0 billion returned to investors to date.”

There is an estimated to be more than 1.0 billion of capital available from domestic private equity funds, providing alternatives for mid-market and large private companies seeking new capital. The early-stage venture market looked promising at the end of 2019 with the Government Elevate Fund established and international fund managers showing interest in local presence.

Buy-out private equity activity in 2019 included: Advent International’s investment in Transaction Services Group and Adamantem Capital’s investment in Hellers.

Colin McKinnon New Zealand Private Capital Association executive director said, “The strong mid-market and an emerging venture market at the end of 2019 provides fund managers with an opportunity to contribute to the efforts of owners and entrepreneurs rebuilding their businesses. As economic clarity emerges, we expect private capital will work alongside management teams to lead the market towards stronger and more resilient companies.”

“Private capital assists in accelerating growth ambitions of New Zealand businesses. Growing businesses with capital and expertise improves productivity, which is good for New Zealand,” said Mr McKinnon.

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