SMBs bag $40m capital fund boost

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The New Zealand Superannuation Fund has committed to a NZ$40 million expansion which will invest in privately-owned, small to medium-sized Kiwi businesses which are expanding in large international markets.

Managed by Auckland-based Pioneer Capital (PCPII), the investment was part of a broader opportunity that the Fund had identified to provide expansion capital to small to medium-sized New Zealand companies.

“There is a significant pool of smaller, high-growth companies in New Zealand that can potentially provide attractive investment opportunities to long-term investors such as the Fund,” says Matt Whineray, general manager of Investments, New Zealand Superannuation Fund,

Other New Zealand institutions, private investors and the Pioneer Capital team have also contributed to PCPII, which is expected to soon close at its $150 million hard-cap.

Randal Barrett, a managing director of Pioneer Capital, welcomed the New Zealand Superannuation Fund as the cornerstone investor in PCPII, and acknowledged the strong support for PCPII from existing and new investors.

Barrett says Pioneer Capital focuses on well-managed New Zealand businesses, typically exporters that are expanding in large international markets, earning meaningful revenue and delivering high-value products and services to their customers.

“Our investment capital, with a target range of $10 – $30 million per investment, is primarily designed to fund expansion, which may include acquisitions,” he says.

“It may also provide a bridge to public markets or a change of ownership.

“Key for us is the calibre of management and the nature of the international markets in which they are expanding their business.”

Current Pioneer Capital investments include online retail search provider SLI Systems, healthcare software provider Orion Health and premium beer producer Moa Group.

The Fund currently has around $3.5 billion invested in New Zealand, including more than $1 billion in the local sharemarket, up from $2.4 billion in June 2009.

Previous Fund commitments to New Zealand expansion capital include $30 million with Pencarrow Private Equity in 2011 and $30 million with Waterman Capital in 2010.

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