Summerset on growth fast-track plan

An Australian private equity group has taken a half stake in retirement village operator Summerset Group, which plans to use the fresh capital for growth and entry into the South Island.

Sydney-based Quadrant Private Equity took just over 49 per cent of the firm with AMP Capital selling down its stake in the wake of a cancelled planned listing of Summerset in 2007.

The price for the stake has not been disclosed, and some Summerset executives have taken small stakes in the new holdings group which runs and owns the villages.

Summerset chief executive Norah Barlow said Quadrant's investment would be used to fast track growth plans.

"There's no debt repayment required, it's all about capital injection to get better growth.

"The business plan as such (hasn't changed), we've been a development company from the start," she said.

An eventual listing of the company was not out of the question. "We definitely aren't ruling anything out."

AMP Capital decided to cancel the plan to list the company in August 2007 given a lack of investor interest within a volatile market that saw separate listings dropped.

AMP bought the stake for $125.8 million in November 2005 when the company had 777 villas-apartments and 330 beds. Barlow said the company now had 1200 villas and 328 care beds with gross assets of $350m and net assets of $170m.

Summerset would now look at both greenfields opportunities, the potential to buy planned or completed developments that would suit its model.

Summerset wanted to own 20 villages by 2011 including some south of Cook Strait. A South Island presence would be sought as soon as possible, but sites were hard to find, Barlow said.

"It's a time where you can take opportunities isn't it . . . we've got about four (New Zealand-wide) projects we're looking at the moment."

Summerset marketing manager Tristan Saunders said the company now had 13 villages and developments in the North Island. Eight were established villages and five were being developed or had recently been completed including Napier, Aotea near Porirua, Warkworth, Hastings and Manukau.

Separately the company had two land holdings and targeted "middle New Zealand" and anyone aged 55 or older.

The company had proportionally fewer rest home beds than larger rival NZX-listed Christchurch-based Ryman Healthcare.

The management team behind the retirement village operator remained in place and focused on the same business plan, Saunders said.

AMP Capital spokeswoman Sue Ryan said the Quadrant deal had been given the nod by the Overseas Investment Office.

Quadrant's Chris Hadley and Marcus Darville had been included on the Summerset Group Holdings board, as recognised on the NZ Companies Office website.

Quadrant - now with A$765m of funds under management - in 2006 bought into Kathmandu then owned by Jan Cameron. It also has investments in fast food chicken companies Red Rooster and Oporto.

"The reason Quadrant found it such a good investment is because it has been a very good performing company," Ryan said.

Quadrant Private Equity was not available for comment.

- © Fairfax NZ News