EY refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Recent Searches
2022 was another year of record activity, with $5 billion of combined investments and divestments across private equity and venture capital transactions, weighted slightly towards investment activity.
Significant investments included the acquisition of Ziwi Limited, Gull NZ and Ritchies Transport. Significant divestments included the sale of Partners Life, Evolution Healthcare and NZ Bus.Total investment activity increased in 2022 totalling $2,949 million, compared to $1,532 million in 2021.
The increase was driven by a higher average transaction value in 2022 ($11m) compared to 2021 ($6m). There was a small increase in the number of investments in 2022 (265) compared to 2021 (252). Private equity investment excluding venture capital reached $2,630 million, compared with $1,152 million in 2021 and $2,187 million in 2020.
Private equity investment (excluding venture capital)
compared with $1,152 million in 2021 and $2,187 million in 2020
Venture and early-stage investment in 2022 totalled $320m, this represents a slight decrease from the record of $380m in 2021. Investment in IT/software companies continued the theme seen in recent years to extend access to capital for young companies.
Venture and early stage capital (in 2022 totalled)
a slight decrease from the record of $380m in 2021
The commitment to growing New Zealand’s businesses has been clear in responses to the Monitor, with focus areas for their investee companies in line with the prior year: these include focussing on growth in exports and new markets, increased capital expenditure and acquisitions. Fund-raising activity in 2022 by New Zealand funds raised over $739m of capital and further fundraisings are anticipated for 2023.
New Zealand capital markets continued to show a low level of activity in 2022 with respect to public markets. The outlook for the next six months remains tempered as a result of current global macro-economic factors, with levels of optimism increasing in future years.
Private capital remains a significant contributor to the New Zealand capital market ecosystem. With the world emerging from the impacts of COVID-19, private equity and venture capital fund managers can provide much-needed expertise and assistance to founders and managers, as well as additional capital support.
We see private capital continuing to play an important role throughout the coming year, particularly as businesses face continued high inflation and cost of debt. This will see many businesses look to equity to both shore up their businesses and provide for more flexible growth.
NZ Private Capital promotes the growth story with targeted communications that feature business owners’ experience working with private equity and venture capital managers.
Summary
Private capital is a significant contributor to the New Zealand capital market eco-system.