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Kerr's Torchlight taps sophisticated investors for $150 mill war chest

Monday 5th July 2010

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Pyne Gould’s cornerstone investor George Kerr has tapped sophisticated investors for a $150 million war chest seeking opportunities while banks are unwilling to open their credit lines.  

Torchlight, the vehicle that provided a $100 million facility to embattled financier South Canterbury Finance, will manage the fund, called the Torchlight Fund No.1 LP, which could rise by a further $20 million following reserved allocations.

The backing came from local and international investors and investment companies. Torchlight Investment managing director John Duncan said the fund will focus on investment opportunities when banking capital is restricted.  

“This is the case with Torchlight’s SCF loan which is delivering liquidity to help them get through their restructuring whilst delivering attractive yield to Torchlight investors at a super senior risk position, ranking ahead of debenture holders,” Duncan said in a statement.  

Reserve Bank Governor Alan Bollard is keen to see business lending resume after the global financial crisis sapped banks’ ability to provide funding for the commercial sector, and forced many businesses to either pay down their debt or shut up shop.  

Torchlight Investment, which is part of Pyne Gould’s wealth management arm, owns 10%, or $15 million, of the Torchlight Fund – which is equal to its exposure to SCF.

The Pyne Gould unit will have access to substantially more funds from co-investors when it lead manages and arranges bigger deals, Kerr said.  

The shares rose 5.3% to 40 cents in trading today.

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