Rakaia Fund happy with Mercer investment

Last updated 05:00 13/12/2013

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Rakaia Fund, run by Christchurch firm Murray Capital, says its $5 million investment in the listed Mercer Group has gone "pretty well".

Mercer shares have quadrupled in value since the private equity fund first invested early in 2011, and recently the fund exercised warrants to get extra shares.

From late 2009, Murray and Co's subsidiary Murray Capital raised $15.075m from about 40 investors with the intent to invest in three to five prime mid-sized companies needing capital for restructuring and growth.

Rakaia Fund manager Richard Rookes said there was about $5m left for further investment.

"We've invested two-thirds of that fund to date . . . we are considering a number of opportunities at the moment," he said.

Rookes said the fund had invested $5m in Mercer.

In November the fund had bought further shares in Mercer at 5c a share, through warrants it held, to take the fund's total share in Mercer to around 36.17 per cent. The investment had taken place at a time Mercer was recapitalising and restructuring.

The warrants had been issued because the Rakaia Fund had committed $5m to invest in Mercer, but under the rights issue involving other shareholders it had only received an initial $3.3m of shares. The option to exercise the warrants had to take place within a three-year period.

After the Rakaia fund the next biggest investor in Mercer is Humphry Rolleston, with around 31.7 per cent.

Rolleston chairs the investment committee of the Rakaia Fund but in terms of the Mercer investment the committee is chaired by Alan Isaac, a former chairman of KPMG New Zealand.

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