NZVCA Newsletter February 2015

NZVCA Newsletter February 2015

NZ Private Equity & Venture Capital info@nzvca.co.nz via mail48.wdc01.mcdlv.net

A Chapman Tripp report on prospects for 2015 said "the current strength of both the M&A and ECM markets means dual-track processes” could feature in 2015. “Roll-ups, the acquisition and aggregation of private companies operating in the same market” and private equity transactions will “likely be given the warm reception they received in 2014”. (See below)

A 2014 survey of NZVCA members highlighted the need for more targeted communications to tell the private capital story. Privately-owned businesses often need shareholding partners to achieve growth ambitions or execute succession plans. The New Zealand mid-market PE story is positive but largely untold amongst business owners and their advisers. We are helping business owners tell their story by writing stories that will feature in selected public media and member client publications.

The BVCA has launched a campaign to explain why PE & VC matter to the UK (see below). We believe it is time for the NZ story. We are working on this as part of the NZVCA 2015 research programme.

The 2015 annual conference will be held in Queenstown on 22 October. Registrations will open on 1 May.

The AVCJ PE & VC Forum in Sydney next week has attracted 140 organisations and 75 Limited Partners from 11 countries. I will be providing a note on highlights to members after the event.

Matthew Houtman, Pioneer Capital, completed his two-year term as chair of NZVCA at the end of 2014 and fellow council member Matt Riley has assumed the chair.

We thank Matthew Houtman for his leadership and welcome Matt Riley who is keen to continue to enhance the profile of private capital in New Zealand.

Matt Riley is Executive Director of Waterman Capital. Established in 2004, Waterman Capital has a long track record of investing in, and adding value to businesses in the mid-market space. Matt is a director of Academic Colleges Group, David Reid Homes and was formerly a director of Express Logistics Group.

Matthew Houtman remains on the council.

Colin McKinnon, Executive Director
In this issue:
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• New Zealand Equity Capital markets – trends and insights
• Privately Owned Business Barometer
• Australian Investor Returns
• BVCA explain why private equity matters

Upcoming Events:
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New Zealand Private Equity & Venture Capital Annual conference 2015
22 October 2015
Queenstown
More information coming soon

AVCJ Australia & New Zealand 2015 Forum
4-6 March 2015
Sydney
More information

New Zealand Equity Capital markets – trends and insights
Healthy mid-market IPO activity predicted

Chapman Tripp sees neither boom nor bust on the horizon. Their view is that 2015 is likely to see continued healthy IPO activity, with an emphasis on the mid-market and the potential for a number of market deals reflecting a streamlined regulatory environment for offers by listed firms. However, the possibility of offshore uncertainty, such as a European debt/currency crisis, disrupting local activity cannot be discounted.

Read more

Privately Owned Business Barometer
NZ privately owned businesses have their say

Social media, the environment and staff retention among the hot topics

“Privately owned businesses are a vital part of New Zealand communities, and the economy. The Privately Owned Business Barometer is the most comprehensive survey of New Zealand businesses, providing insights and information on the issues affecting them,” said Graham Turley, ANZ’s Managing Director Commercial & Agri.

The survey has been held open until the end of March in response to requests from interested groups. ANZ Bank welcomes NZVCA member participation.

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Australian Investor Returns
PE outperforms listed markets by over 20% over last 12 months

Australian private equity and venture capital outperformed the listed market by over 20% in the 12 months to 30 September 2014, according to data released by the Australian Private Equity and Venture Capital Association Limited (AVCAL) and Cambridge Associates.

The Cambridge Associates LLC Australia Private Equity and Venture Capital Index (the CA Australia Index) posted a gain of 27%, compared to a 6% return for the S&P/ASX 300 Index over the same one-year period.

The CA Australia Index – which is the leading independent performance benchmark for the private equity and venture capital asset class – showed continuing outperformance across all measured time horizons for private equity and venture capital compared with listed equities, from one-quarter to 15-year returns.

“The past few quarters have delivered very good returns for investors with allocations to private equity and venture capital,” said AVCAL Chief Executive Yasser El-Ansary. “This is true of both the early-stage venture capital funds right through to the larger growth private equity and buyout funds.”

“We’ve seen a lot of momentum building in the exit environment over the last eighteen months, especially through initial public offerings on the listed market. Companies backed by private equity also tend to perform well post-listing, as our recent study with Rothschild showed. This demonstrates the long-term value that private equity investment can bring to Australian businesses,” said Mr El-Ansary.

Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia, said: “Institutional investors who have stayed allocated in Australian private equity and venture capital saw strong returns over the last year. Diligent, ongoing investments in the asset classes continue to add value, with many investors achieving net of fees returns of over 600bps above listed markets.”

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BVCA explain why private equity matters
BVCA have launched a major campaigning initiative to demonstrate the significant and wide-ranging impact private equity and venture capital has on the UK.

Called The Investment Agenda it has a simple mission - to explain why private equity and venture capital matters: why it matters to business, why it matters to the economy and why it matters to the UK.
Over 2,200 companies in the UK are currently backed by private equity and venture capital, with over £30 billion invested and employing more than 800,000 people according to figures published by the British Private Equity & Venture Capital Association (BVCA).

Welcoming the launch of The Investment Agenda, Tim Hames, Director General of the BVCA, said:
“Business and investment is already emerging as one of the key battlegrounds on which the General Election will be fought, and for good reason. The future prosperity of the UK economy is dependent upon its ability to attract and encourage investment. In order to compete on the world stage, the country needs companies to grow, entrepreneurship to be stimulated and innovation funded.

Read more

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