the new zealand p.e. market

The New Zealand P.E. MarketThe New Zealand P.E. Market

“I’m looking for a hedge against my hedge funds”

The New Zealand P.E. MarketThe New Zealand P.E. Market

“I’m looking for a hedge against my hedge funds”

Key MessagesKey Messages

• Established, growing and successful market

• Experienced managers – off-shore and on-shore

• Less risk than is perceived – diversification, advice

New Zealand

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

InvestorsInvestors

“I won’t be able to handle your account anymore, as it suddenly appears that you’re a small investor.”

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

The New Zealand Private Equity Industry Today:The New Zealand Private Equity Industry Today: InfrastructureInfrastructure

Legal: No LLP Structure – 2007?

but

AdvisorsAdvisors

“We’re expecting stocks to rally, but we don’t know which ones and when”

AdvisorsAdvisors

Onshore 1

Offshore 2

All 2005

DiversificationDiversification

I meant everything I said last night, especially the part about how diversifying your equity portfolio allows you to participate

in growth potential

The New Zealand Private Equity Industry Today:The New Zealand Private Equity Industry Today: DiversificationDiversification

The New Zealand Private Equity Industry Today:The New Zealand Private Equity Industry Today: DiversificationDiversification

Track RecordTrack Record

“Very impressive. I’d like to find five thousand more like you.”

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

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

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