“The amount of capital raised in new funds is both exciting, but also giving rise to concerns on deal pricing.”
Brad Wheeler, Partner, Ernst & Young Transaction Advisory Services Limited
Mid-market private equity investment/divestment summary 2003 to 2016 (graph)
- The level of mid-market investment from deals with disclosed values decreased to NZ$100.8m from NZ$284.1m in 2015.
- The average investment value decreased markedly from NZ$ 16.7m in 2015 (across 17 deals) to NZ$9.2m in 2016 (across 11 deals).
Mid-market investments – domicile (graph)
- 2016 mid-market investment activity has been underpinned by ongoing New Zealand domiciled fund activity.
- Notable 2016 deals included Waterman Capital’s investment in My Food Bag, Maui Capital’s investment in Pedersen Group and Pencarrow Private Equity’s investment in MMC.
Venture and early stage investments by sector (graph)
- Technology is the dominant sector for venture capital, while IT/software remains a strong presence.
- Other sectors obtaining venture capital funding in the year included health/biosciences and manufacturing.
Buy-out private equity investment/divestment summary 2005-2016 (graph)
- The observed deal value trends from 2005 to date are a result of a small number of high value transactions in this segment. 2016 saw a number of buy-out deals in both investment and divestment.
Next 6 months (graph)
- Respondents’ short term outlook has improved on 2015 and remains optimistic. This reflects the New Zealand economy’s relative resilience compared to global markets.
Next 18 Months (graph)
- The outlook for the next 18 months is neutral, a decrease on both 2015 and 2014, with continued uncertainty across global markets post-US election and with Brexit and ongoing consideration.
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