Insights from the NZ Private Capital Conference 2023

The NZ Private Capital Conference always presents an excellent opportunity for networking and discussion, and this year was no different. Held at Queenstown’s QT Hotel on 19 October, the conference looked at global trends such as future technology and impactful innovation and explored the overall outlook across the private capital industry. 

As a sponsor of the conference, BDO was delighted to attend and share insights, hear from various speakers, and spend time with other private capital professionals from across the industry.  

Some of the key takeaways from conference include the following: 

• The sentiment in the private equity sector is largely optimistic, despite a flat economic outlook currently. Private capital investors believe that now presents as good a time and opportunity as ever to invest. While there has been a noticeable lack of deals completing this year, that is largely due to valuation gaps between investors and vendors, rather than a lack of appetite due to broader economic conditions. 
   
• Private equity as an investment class outperforms listed equity markets by more than 2x. This insight was highlighted in of a presentation of fund performance in New Zealand and Australia. It shows that New Zealand is part of a well-established Australasian private equity and venture capital sector which has significant capital to invest.  
   
• The mid-market is the sweet spot for private equity investors in New Zealand and generates strong returns. In fact, data shows the mid-market space generates better returns than large deals and early-stage venture capital deals. 
   
• KiwiSaver funds are emerging as a growing investor into private equity funds. In 2009, KiwiSaver had virtually no investment in private equity funds, and now they contribute 8%. This significant increase looks to follow in Australian superfunds’ path, where they contribute more than 50% of fund investment. New Zealand’s mid-market has traditionally been very hard for investors to obtain access to, with very few mid-market companies on the NZX or the ASX, so KiwiSaver investing in the funds presents an opportunity for both investors and mid-market businesses. 

With such a wide range of topics discussed across the conference, the above is just a snapshot of what we at BDO found particularly interesting from the presentations we attended. We look forward to seeing how these trends emerge further in the market as we lead into 2024. 

For more on private equity and the mid-market, reach out to our Corporate Finance team here.