the new zealand p.e. market “i’m looking for a hedge against my hedge funds”
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The New Zealand P.E. MarketThe New Zealand P.E. Market
“I’m looking for a hedge against my hedge funds”
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The New Zealand P.E. MarketThe New Zealand P.E. Market
“I’m looking for a hedge against my hedge funds”
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Key MessagesKey Messages
• Established, growing and successful market
• Experienced managers – off-shore and on-shore
• Less risk than is perceived – diversification, advice
New Zealand
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Key Drivers To Industry DevelopmentKey Drivers To Industry Development
1. Accessible institutions - investors
2. Infrastructure
- Advisors
- Benign tax environment
- Familiar legal environment
3. Portfolio diversification
- Manager
- Investee
4. Demonstrable success
- Manager track record
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InvestorsInvestors
“I won’t be able to handle your account anymore, as it suddenly appears that you’re a small investor.”
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The New Zealand Private Equity Industry Today:The New Zealand Private Equity Industry Today: InvestorsInvestors
• Poor representation amongst the New Zealand superannuation funds:
Liquidity, J curve, manager selection, no track record
• Retail: Relatively well developed – Hauraki I and II, Pohutukawa
Source: Direct Capital
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The New Zealand Private Equity Industry Today:The New Zealand Private Equity Industry Today: InfrastructureInfrastructure
Legal: No LLP Structure – 2007?
but
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AdvisorsAdvisors
“We’re expecting stocks to rally, but we don’t know which ones and when”
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AdvisorsAdvisors
Onshore 1
Offshore 2
All 2005
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DiversificationDiversification
I meant everything I said last night, especially the part about how diversifying your equity portfolio allows you to participate
in growth potential
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The New Zealand Private Equity Industry Today:The New Zealand Private Equity Industry Today: DiversificationDiversification
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The New Zealand Private Equity Industry Today:The New Zealand Private Equity Industry Today: DiversificationDiversification
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Track RecordTrack Record
“Very impressive. I’d like to find five thousand more like you.”
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The New Zealand Private Equity Industry Today:The New Zealand Private Equity Industry Today:
Track RecordTrack Record
No of funds
Average IRR
Pooled IRR
Upper IRR
DPI
RVPI
TVPI
New Zealand mid market from inception to 31 March 2005
Source
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Track Record – International Track Record – International ComparisonComparison
No of Funds
Average IRR
Pooled IRR
Upper IRR
DPI RVPI TVPI
NZ Mid Market
Australian PE *
83
10.3
10.6
13.9
0.71
0.61
1.32
UK PE **
267
13.0
* From inception to 30 June 2004 entire industry – source AVCAL
** All funds to 31 December 2004 – source BVCA
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Summary Of TodaySummary Of Today
• There is a growing market
• There are experienced managers
• There is the ability to diversify
• There is today the infrastructure to support investors