The New Zealand Superannuation Fund, which invests to financethe country's universal state pension, will place $40 million in a new $150 million venture capital fund to finance fast-growing small- to medium-sized businesses with global potential.
The funds will be placed with Auckland-based Pioneer Capital, which already holds stakes in recently listed software company SLI Systems, boutique brewer Moa beer and health system software developer Orion Health.
This is Pioneer Capital's second fund, to be known as PCPII, which is seeking $150 million to invest in privately-owned, SMEs which are expanding in large international markets, with average investments of between $10 million and $30 million.
"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, the super fund's general manager for Investments.
Other New Zealand institutions, private investors and the Pioneer Capital team have also contributed to PCPII, of which the super fund will be cornerstone investor.
"Our investment capital is primarily designed to fund expansion, which may include acquisitions," says Randal Barrett, a managing director at Pioneer. "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."
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.