Pencarrow looks at Canterbury opportunities for $124m fund

Private equity firm keen on getting exposure to the $30 billion rebuild.

Pencarrow Private Equity, whose past investments have included paper merchant BJ Ball and buggy maker Phil & Teds, is keeping an eye on ways to leverage the $30 billion rebuild of Christchurch having raising $124 million for its new fund.

The private equity firm has already run the ruler over 60 companies for its Pencarrow IV Fund to invest in and would be keen on getting exposure to the Canterbury rebuild, executive director Nigel Bingham told BusinessDesk.

"We're looking at things like building materials as something piquing our interest," he says.

The fund is Pencarrow's biggest and Mr Bingham said there was a lot of interest, with investors looking for better returns. About 80 percent of the fund's investment came from institutions and the rest from high net individuals, all of which was raised locally.

Pencarrow plans to make six to nine investments in companies on the verge of expansion with the proceeds, in firms valued at between $20 million and $100 million.

Investment opportunities include transport and logistics, engineering, niche manufacturing and food productions, Mr Bingham says.

He is hopeful about making an announcement in the coming months, though he will not be rushed to make sure he gets a good price.

"Pricing is generally pretty reasonable – you can't pick up things too cheaply at the moment." 

Companies with export opportunities are also attractive and Mr Bingham says if an exporter can survive with the currency at this elevated level it becomes more attractive.

He expects to close off its Pencarrow III fund, which invested in BJ Ball and Phil & Ted's, by the end of next year and may realise one of its investments this year.

The fund still holds interests in NZ Crane Hire and Rishworth Aviation.

Pencarrow specialises in providing expansion capital for small to mid-market firms and enabling management buy-outs of businesses.