AMP subsidiary AMP Asset Management is joining an Auckland-based investment bank to offer private capital to New Zealand technology companies.
The deal with Caltech Capital Partners is part of AMPAM's plan to establish its New Zealand development capital business. AMPAM, which manages $5b in private capital globally, has been developing its private capital business in New Zealand for the last six months and has more than $30m invested in private capital locally.
The agreement will enable AMPAM and Caltech to jointly provide later stage and "mezzanine" (prior to stock market listing) financing to technology-based companies with minimum revenues of $15 million.
Caltech Capital Parnters managing director Wendie Hall says the preferred deal size will be in the $5 million to $15 million range, although offshore investor relationships will allow consideration of larger deals. "In the past we have focused on early sales stage companies," she says, "but this partnership will allow us to help larger companies expand without the need to sell New Zealand technology offshore to fund growth." She says Caltech is actually talking to several companies including those in the IT sector.
Hall says Caltech has already provided "substantial funding" to technology companies including software developers.
"A company likely to be suitable for investment would be one that already has a large domestic market share, most likely in Australia or Asia. It would be looking to expand further offshore and typically would consider technology to be integral to their business," Hall says.
Martin Turner, a private capital manager for AMPAM, says technology-based companies will play an increasing role in the country's economy. "We are keen to see it supported. It's good for our clients and good for New Zealand."