Fund managers set a challenge

ROB STOCK
Last updated 05:00 22/06/2014
Challenge Partners
CUT ABOVE: Fieldmaster’s super light, super fast mower at work at Auckland Airport.
Challenge Partners
LAWRENCE SMITH/Fairfax NZ
Paul Ayers, left, and Myles Cooper of Challenge Partners.

Relevant offers

Small Business

Jyoti Morningstar: How I keep well Spread your brand far and wide Entrepreneurs nervous about election Small business: Get up and running lean Moving your business to the US Dargaville's Jack Fannon calls it a day Investment in startups the answer, says Parker Bankrupt but not beaten Hi-tech knight saves women's lives Status quo for employment law

Setting a world record for the fastest ever mowing of a hectare of grass and building a mini industrial conglomerate, are the unusual combined aims of an investment operation seeking further backers.

Former British Royal Navy officer Paul Ayers and former CEO and business owner Myles Cooper of Challenge Partners are seeking wealthy investors to help fund buying and building up tired industrial businesses with potential. Investors buy a "seat" in Challenge Partners which trades as the New Zealand Consolidation Fund.

Challenge Partners has already made a couple of purchases including Pukekohe-based Fieldmaster, a manufacturer of agricultural equipment.

The company has long specialised in field management equipment like hay harvesting trailers attached to the back of tractors and early last year because working on a new project with export potential - an industrial mower for airports.

Airports need to be mowed regularly to limit the number of birds attracted to seeding grass. These birds can be sucked into the engines of planes with the potential for crashes and loss of life.

But airports now operate 24/7, providing a narrow timeframe in which grass can be cut. Airports also tend to be low-lying and many become water-logged in winter. Churning up the surface using heavy tractor-pulled mowers in winter isn't an option as it slows mowing during the warmer seasons when the ground firms up.

Fieldmaster has designed a light-weight, super speedy industrial mower that has been tested at speeds of 20kmh. Ayers said the company is planning a stab at setting a world record for the fastest mowing of a hectare.

"We reckon if we really pulled out all the stops, we could do it in 90 seconds," he said.

Prototypes for the new mower have been tested at Auckland Airport and Ayers is hopeful the combination of speed and lightness will open up a global export market selling them to other airports.

The other purchase Challenge Partners has made is LEP Engineering Plastics, a major manufacturer, importer and distributor of industrial plastics. It makes and supplies many of New Zealand's best known businesses with industrial plastics products including the wheels of Rainbow's End roller-coasters.

Ad Feedback

Cooper and Myles' modus operandi is to take sole ownership of solid New Zealand companies which support vital industries with tangible products and services, and build them.

Challenge Partners operates under a company structure in which investors acquire a "seat" which involves making a loan to the company when they are issued shares. This $650,000 loan is repaid by the company before dividends are issued. The seat entitles investors to a share block with voting rights. The number of seats is limited to 20 and nine are still available.

Ayers and Cooper want more funds for another purchase though they're keeping mum on just what at this stage.

The pair believed manufacturing still has a big future in New Zealand, especially as costs spiral in China and there are continuing problems with quality with overseas-based manufacturing.

Existing investors in Challenge Partners can oust Cooper and Ayers if they fail to live up to expectations. Most are former business owners and they have been contributing expertise and advice.

The ultimate aim is to build a mini-conglomerate to remain as an income fund or to sell to institutional investors in the long-run, but Ayers and Cooper say they are enjoying ensuring Kiwi ownership of businesses.

"This is all about bringing overseas-owned investment earnings back to this country."

He said multi-national owners of businesses were well-advised by tax specialists and had ways of transferring taxable earnings offshore, eroding the New Zealand tax base.

"We have paid more tax in the six months since we bought it [LEP Engineering], than it has paid in the last couple of years," he said.

- Sunday Star Times

Special offers
Opinion poll

Do you feel better off than at this time last year?

Yes

No

In some areas yes, others no

Vote Result

Featured Promotions

Sponsored Content