New Zealand Sovereign Fund Commits to Domestic Expansion Capital
Often time sovereign funds allocate capital within their home markets. Positive externalities include local job creation and higher tax revenue for the government. In terms of small to medium-sized businesses, they tend to generate a significant portion of a country’s gross domestic product.
Being a cornerstone investor, the New Zealand Superannuation Fund (NZSF) committed NZ$ 40 million to a new expansion fund managed by Auckland-based Pioneer Capital. Pioneer Capital’s second fund will target private-owned, small to medium-sized New Zealand businesses that plan to expand into international markets. The fund capital will target exporters that need expansion capital in the NZ$ 10 to 30 million range.
In a press release, Matt Whineray, GM Investments for the New Zealand Superannuation Fund, “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.”
Expansion capital funds are not new for the NZSF as previous commitments include NZ$ 30 million with Pencarrow Private Equity in 2011 and NZ$ 30 million with Waterman Capital in 2010.
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