Private Capital Investors Influence Market Productivity

Private capital investors have positive spill-over effects on the performance of peer companies in the same industry according to evidence from international research. The research indicates that Private Equity has positive effects in helping target firms become more competitive – or survive – when economic conditions are less favourable.

The latest Coller Capital Private Equity Findings reports that as private equity has grown, its influence has touched more companies with effects on competitors, public markets and sector productivity.

NZ Private Capital Executive Director Colin McKinnon said, “Over one billion dollars was invested in mid-sized and large New Zealand companies by private investors in 2019. If these investment transactions have influenced more companies to compete harder and improve productivity, that is a spill-over effect that helps industries to grow faster and become more efficient, which will only increase aggregate productivity over the long term.”

McKinnon said that “many of New Zealand’s largest companies have accelerated global ambitions with capital and capability provided by private capital investors. Today there is over one billion dollars of capital ready to help many more companies grow faster and become more efficient.

NZ Private Capital is a not-for-profit industry association committed to developing the venture capital and private equity industry in New Zealand. Its core objectives include the promotion of the industry and the asset class and to develop a world-leading venture capital and private equity environment for the benefit of investors and entrepreneurs in New Zealand.

New Zealand Private Capital aims to foster understanding that private equity and venture capital firms accelerate the ambition of New Zealand business owners through operational improvement and investment performance.

New Zealand is home to many examples of private capital partnering with companies to improve growth and performance, to share expertise and capital. This ultimately delivers improved productivity, creates jobs and contributes to the national economy.

Association members include venture capital and private equity investors, financial organisations, professional advisors, academic organisations and government or quasi-government agencies.

Its activities cover the spectrum of investment in New Zealand private capital including Angel investment, seed and early-stage venture capital through to expansion capital and private equity (including management buy-outs and buy-ins).

The association also helps businesses navigate and understand the Private Equity and Venture Capital world. Markets and growth require the free flow of capital and the association provides an important role in linking business owners with investors.

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