Private capital activity in New Zealand increased by 2.4% in 2022 but was down across some key stages.
Total investment and divestment across all stages of private equity and venture capital increased to $NZ4.9 billion, up from $NZ4.7 billion in 2021. This record figure was boosted by $NZ2.3 billion in large private equity investments including Chinese firm FountainVest’s acquisition of pet food company Ziwi, KKR investing in Ritchies Transport, Silverlake Partners’ investing in NZ Rugby and Allegro Funds’ acquiring petrol stations business Gull NZ.
Mid-market investment of $NZ342 million was down substantially from the record of $NZ641 million in 2021 but was still strong historically. The average mid-market transaction value was $NZ9 million, well down from the 2021 average of $NZ26 million.
Early-stage venture capital investment fell less steeply, amounting to $NZ319 million compared with $NZ380 million in 2021.
These figures are from EY’s New Zealand Private Capital Monitor released on 11 May.
While overseas firms dominated larger buyout deals, New Zealand domiciled fund managers continued to be the most active in the mid-market with Pioneer Capital, Milford Asset Management, Direct Capital, NZ Equity Partners, Oriens Capital and Rangatira among those to make new investments.
Chair of New Zealand Private Capital Philippa Weston, of Pencarrow Private Equity, said it was great to see New Zealand funds investing in the country’s mid-market.
EY partner Brad Wheeler said outlook of private capital investors in the short-term had turned pessimistic but their levels of optimism increased looking further out.
Over the decade to December 2022, a total of $NZ1.7 billion had been invested in 914 early-stage transactions. During 2022, early-stage investment was mainly in IT/software companies continuing the trend of recent years.
New Zealand Private Capital executive director Colin McKinnon said 2022 had proved to be another busy year for the private capital industry.