Friday 11th August 2017
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(Correction to title)
First NZ Capital is to formalise its channel for private investors to support mid to large-sized New Zealand companies seeking capital without listing on a public sharemarket.
The new initiative will be called Principal Investments and is the first major initiative by the firm under the leadership of James Lee, who took over as chief executive from Scott St John on April 1.
"The scope of the strategy is wide-ranging, but will be focused on providing the equity and junior debt required to execute transactions and grow businesses, including financing acquisitions, providing growth capital, taking pre-IPO stakes and succession planning. Investments will be funded using a mix of capital from the FNZC balance sheet and its existing network of private investors," Lee said in a statement.
He told BusinessDesk there was no pre-determined fund available, with the firm able to access both its own balance sheet and its network of private investors to respond to specific opportunities.
Heading the operation will be Michael Walmsley, who was most recently associate director and second-in-command at the Macquarie Capital Principal Transactions Group in London.
Asked whether this was evidence of waning interest in capital-raising using public markets, Lee said: "We would say the opposite."
"Public markets are working very well for companies looking to raise $100 million-plus. But $20 million, $30 million is more complicated. Some companies have experienced difficulty in raising capital. In some cases, this has led to pursuing the listed market too early. Private equity is increasing in size, which is fantastic, but some companies don't fit private equity requirements.”
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