Time for a chat?
If you are considering taking on a partner to help grow your business, we’ve set out below details of the kind of businesses we like to invest in.
While partnering with a “private equity” investor might feel complicated and unfamiliar, we can assure you it is reasonably straight forward. While we adopt a disciplined approach to assessing investment opportunities, we are by nature down to earth personalities just like you, and apply a good dose of common sense to everything we do.
We also like to take the time to get to know you and your business (and you us) before we take the plunge, so even if you’re not looking for an investment partner right now, we are always happy to get together to begin a conversation.
If you would like to meet with one of our team for a chat, feel free to contact us here:
What We Look For
NZEP invests in private businesses that are in the $2m to $30m enterprise value range. We typically look to invest $1m to $5m in equity – as a rule of thumb businesses of this size have positive earnings of $1m up to $5m.
We look to use our capital to fund organic growth (in domestic and off-shore markets), to gain scale through acquisition, and/or to transition management from existing (often older) owners to new/existing management.
We are growth investors, so we are most attracted to businesses that have a solid growth plan that we can help execute, but are also mature enough that “business as usual” has well identified and manageable risks. We are not “venture capital” investors who invest in cash flow negative businesses.
In terms of detail we look for the following attributes:
- Positive free cash-flow and earnings of at least $1m
- A strong market position attributable to an existing or potential sustainable competitive advantage
- Proven products and/or services (we don’t invest in early stage, high risk investments based on commercially unproven technology)
- A large addressable market (both domestic and off-shore) in a value added niche – providing significant growth potential
- Proven existing management willing to make a financial commitment to the business (where needed we are able to strengthen management teams)
We do not have any specific industry or sector focus but we do not invest in property or mining.
How We Operate
We consider ourselves equity partners, which means we are happy to be majority or minority shareholders. During our investment process a key area of focus for us is getting to know the management team and other shareholders to make sure our personalities and aims fit well together. We also spend considerable time clarifying and agreeing the path forward so all stakeholders are “rowing in the same direction”. We have found a group of intelligent and aligned shareholders and managers executing on a well-funded, clear business plan to be a very powerful model and frankly a great deal of fun.
We don’t generally look to take management positions in businesses we invest in (although we sometimes do on a short term contract basis if the business needs us to). Instead we look to bring value at a shareholder and Board level in the following ways:
- Strategy & Execution: Strategy formulation, identifying growth opportunities, and the skills and experience necessary to help execute
- Extensive Networks: Providing access to our networks to get in front of the right people when needed – whether that be for market intelligence, merger and acquisition discussions or to get a warm introduction to a new customer/supplier
- Talent Acquisition: Gaining access to a large pool of talented senior executives with a diverse range of skill sets who can be called upon to assist with operational, strategic and governance initiatives
- M&A: Extensive merger and acquisition expertise from 30 years’ experience investing in, guiding and growing NZ SME businesses across a multitude of industries
- Governance: Governance best practice mixed with our proprietary “light-touch” approach that fosters the entrepreneurial nature inherent in NZ SME’s
- Capital Structure: Balance sheet optimisation (releasing cash from working capital and using prudent levels of bank debt where appropriate)
- Sounding Board: Providing a sounding board for management – it’s lonely at the top