Venture fund has listings in mind

Last updated 15:20 26/09/2012

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The crown-owned New Zealand Venture Investment Fund says it would like to see 15 to 20 of the early-stage ventures it has invested in over the past 10 years list on the NZX.

The statement followed heart-searching in an Auckland newspaper over the high number of young Kiwi technology companies that had been privately sold overseas.

NZVIF was set up in 2002 to help kick-start the venture capital industry by investing in high-growth companies. It does so alongside venture capital funds on terms that are favourable to their private investors. 

It has so far invested about $100 million in 125 companies, the bulk of which are information technology or biotechnology firms. One, Xero, was already listed on the NZX when NZVIF made a controversial retrospective investment in it, effectively subsidising the risk of American private investor Peter Thiel.

The only other investment represented on the exchange is superconductor company HTS-100 which is now controlled by NZX-listed Scott Technology.

NZVIF said it would like to see 10 per cent of the companies it invested in float on the NZX, though as it is a minority, passive investor in the companies in which it has stakes, that appears to be beyond its control. A spokesman believed the target was essentially aspirational. 

"A major challenge is the lack of follow-on investment capital when they need $5m to $10m," chief executive Franceska Banga said. 

"For many companies, strategic acquisitions by large international competitors are the preferred way to fund their next stage of development and that will remain the case. But we need to develop the domestic IPO [initial public offering] market as a practical and viable alternative.

"For that to happen, we need to work with the investment and brokering community on building the pipeline of prospective listings and map a path forward from early-stage private investment to NZX listings," she said.

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