To enable retail investors to participate in the New Zealand private equity market Craigs Investment Partners and Direct Capital have established the Pohutukawa Funds - a professionally managed private equity programme for the retail investor.
By pooling capital and engaging an experienced manager, a Fund is able to achieve the financial strength and investment expertise needed to successfully participate in private equity investment.
Individual investors typically do not have the time or the ability to identify or access investment opportunities in unlisted companies, or the resources to evaluate and monitor such investments. When investing with a Fund these roles are performed on behalf of investors in the Fund.
A Fund has the resources to build a diversified portfolio of investee businesses.
Investment through a Fund, enables investment into a much wider range and number of investments, thereby reducing overall risk.
The rationale for investing in Pohutukawa can be broken into five key themes. First, the current market environment presents appealing investment opportunities for private equity investors. Secondly, in the medium term private equity could benefit from the demand for succession planning. Thirdly, returns from private equity, over the medium to long term, have outperformed listed equities. Fourthly, private equity, and Pohutukawa in particular, can invest in a much wider range of investment opportunities outside listed equities, bringing important diversification benefits to portfolio investors. Finally, as private equity now forms an established and growing part of most institutional investors’ investment portfolios, it is equally appropriate for private investors.
Pohutukawa I
Established in 2004 with committed capital of $53 million. Pohutukawa I made 12 distinct investments. There have been 8 liquidity events to date and Pohutukawa I has 4 remaining investments, plus an investment in BioPacificVentures.
As at 31 December 2015 shareholders in Pohutukawa I who invested $1 per share have received gross distributions of $1.11 per share.
Pohutukawa II
Established in March 2009 with committed capital of $82.5 million. Pohutukawa II has 7 remaining investments following the sale of its shareholding in Transaction Services in 2015.
As at 31 December 2015 shareholders in Pohutukawa II who invested $0.62 per share have received gross distributions of $0.70 per share.
Investors hold both ordinary and redeemable preference shares in the Pohutukawa funds.
Investors also hold redeemable preference shares in each of the Pohutukawa investment companies, which make the investments in the portfolio companies.
As an example, the investment in the Pohutukawa II portfolio company Transaction Services was made through the investment company Pohutukawa Alpha. Pohutukawa investors hold redeemable preference shares in Pohutukawa Alpha.
These are called stapled securities. The number of ordinary shares on issue remains constant while the ratio of preference shares reduces as investments are realised and preference shares are redeemed.
Chairman and Independent Director
John is a Company director and trustee with more than 30 year’s experience in executive and management positions with the former Fletcher Challenge group of companies through to his retirement in 2001. He has considerable international experience in management, finance, corporate governance best practice and as a director and audit committee member of private and publicly listed companies. John is currently a director of Horizon Energy Distribution Ltd and Oriens Capital Ltd, and he is Chairman of both Pohutukawa Private Equity Ltd and Pohutukawa Private Equity II Ltd. John was previously a director of Air New Zealand for 9 years.
Independent Director
Maurice was previously a director of and CEO of Pumpkin Patch, a position he held from 1993 to 2011. Maurice brings international business experience with him along with a wealth of knowledge in logistics, technology, retail and global expansion. Maurice has held executive positions in accounting, distribution and property development in both New Zealand and Australia. He is a director of Pohutukawa Private Equity II Limited; Industrial Lubricants and Services Limited and a number of other private companies. He was previously a director of Comvita Limited and Pohutukawa Private Equity Limited.
Director
Neil is the founding principal and Chairman of Craigs Investment Partners, a leading full service NZX Participant Firm. Craigs Investment Partners has approximately 430 staff with 17 branches throughout New Zealand. Neil has a broad experience in private equity transactions, stock exchange listings, capital raisings and corporate activity for a wide range of companies. In a personal capacity Neil has been an active private equity investor for many years. Neil is currently a director of Pohutukawa Private Equity Ltd, the first Pohutukawa fund, Pohutukawa Private Equity II Ltd, Pohutukawa Private Equity V Ltd, Kowhai Private Equity No.1 LP, Oriens Capital Ltd as well as Comvita Ltd (Chairman) and director of a number of privately held companies.
Director
Mike was appointed as a director of Pohutukawa Private Equity I & II in September 2013, retiring as a director of Pohutukawa Private Equity I in April 2017. Mike is also a director of Pohutukawa Private Equity V Ltd, Kowhai Private Equity No.1 LP and the New Zealand Social Infrastructure Fund Limited. Mike joined Craigs Investment Partners in March 2009 as Head of Debt Capital Markets, and had been a Director of Craigs Investment Partners since 2001. Mike’s career in financial markets includes 11 years with ABN AMRO, during which he was Head of Acquisition and Leveraged Finance for Australia and New Zealand and Head of Global Markets New Zealand, Brierley Investments Limited for 10 years and Ernst & Young for four years. Mike has previously been a Director of Hospital Car Parking Limited, McConnell Property Limited, Mangawhai Development Holdings Limited, AsiaPower Limited and Aetna Health (New Zealand) Limited. Mike is a director of the AMN Limited private group of companies involved in glass services, Just Plants Ltd group (indoor plant hire) and Signal Corporation Ltd (social media).
The Pohutukawa funds have engaged Pohutukawa Management to provide day to day administration and investment management services.
The Manager is a 50/50 joint venture between Direct Capital and Craigs Investment Partners and will draw on the expertise of both its shareholders.
The Manager has an Investment Committee which is responsible for all investment and divestment decisions for Pohutukawa after reviewing detailed evaluations prepared by the Direct Capital investment team. The Investment Committee comprises three representatives from Direct Capital, two representatives from Craigs Investment Partners, and an independent director of Pohutukawa Private Equity.
Peter Lalor from Craigs Investment Partners manages the day to day operations of the Pohutukawa funds and looks after investor relations.
To contact the Manager please see details in the Contact Us section.
Pohutukawa I
The initial public offering for shares in Pohutukawa I closed on 8 October 2004.
Shares are fully paid to $1.
Gross distributions totalling $1.84 per share have been returned to shareholders to date.
Closing price 31 March 2018 1 cent.
NAV as at 31 March (unaudited) is 1.0 cps after allowing for manager's earnout.
The last sale price was 1 cent
Current bid price: cps nil bids
Current offer price: cps
Pohutukawa II
The initial public offering for shares in Pohutukawa II closed on 27 February 2009.
The initial subscription commitment was $1, paid to 10 cps. On 18 December 2014 the capital commitment was capped at 80 cps.
The shares are paid to 62 cents following five calls - 10 cents paid September 2010; 17 cents paid September 2011; 10 cents paid April 2012; 10 cents paid April 2014; and 5 cents paid June 2015.
Closing price 31 March 2018 23 cents.
Gross distributions totalling 87.7 cps have been returned to shareholders to date.
NAV as at 31 March 2018 (unaudited) is 26.4 cps after allowing for manager's earnout.
The last sale price was 25 cents.
Current bid price: cps
Current offer price: cps
Pohutukawa V
The initial offer for shares in Pohutukawa V closed on 19 December 2016.
PPEV shares are currently paid to 35 cents following a call of 8 cents paid 5 December 2017.The initial subscription commitment was $1, paid to 3 cents on application.
There is 65 cps to be called.
Closing price 31 March 2018 37 cents.
NAV as at 31 March 2018 (unaudited) is 32.4 cps.
Last sale price 37 cents
Current bid price: 37 cps
Current offer price: No offers
While Pohutukawa shares will not be quoted on a registered stock exchange, Craigs Investment Partners facilitates a secondary market for willing buyers/sellers of Pohutukawa I and Pohutukawa II shares.
Guidelines for buying/selling Pohutukawa shares are:
To sell Pohutukawa please:
To buy Pohutukawa please contact your investment advisor and advise the number of Pohutukawa shares you seek and your bid price:
