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Punakaiki Fund raises new capital to make further investments into exciting and new Portfolio Companies, and to pay our operating costs. Punakaiki Fund makes long-term investments into high-growth New Zealand Companies. It currently holds minority positions in 14 companies, listed below:
Our investor net asset value per share has risen from $10 to $22.10 (as at early December, 2019).
The asset value of the fund commenced with $1.5 million in April 2014 and is $54.5 million five years later.
Statement of Investment Policies and Objectives Summary
We believe that the following policies provide the greatest opportunity to generate significant returns for our Shareholders:
- New Zealand Focus: We believe that there are consistently large numbers of high quality New Zealand-based companies seeking funding, but that there is a general shortage of well-directed growth capital. We also believe that there are exploitable market inefficiencies for the supply of growth capital in New Zealand.
- High Growth Focus: We believe that well-selected high-growth companies can generate risk-adjusted returns for our investors that are higher than those from public markets.
- Investor of Choice for Founders: We believe that a founder-centric approach to investment and management attracts the best high growth investment opportunities to Punakaiki Fund.
- Attractive Portfolio: We believe that holding a highly regarded portfolio of investments attracts other highly regarded companies to seek investment from Punakaiki Fund.
- Long-term Investment: We believe that holding investments for the long-term delivers higher returns to our investors.
- Diverse Portfolio: We believe that portfolio diversification reduces the level of risk for a given amount of return.
Punakaiki Fund has a primary objective of delivering Shareholders significant returns over the medium to long-term.
Deliver Significant Returns to Investors
We aim to deliver significant five-year rolling annual returns to Shareholders, measured net of all costs, fees and Punakaiki Fund-level taxes. We believe that strong returns are achievable based on the underlying growth rates of the Portfolio Companies and new companies that we invest in. We also believe that this value will manifest providing that we continue to hold those companies over the long-term, and we will reinvest into companies with this perspective. Value may also be delivered through the sale of our investments.
We aim to be able to eventually meet our internal expense obligations (including the payment of the Management Fee) through dividend flows from Portfolio Companies, rather than by raising new capital.
Punakaiki Fund aims to achieve its objectives by:
Supporting High-Growth Companies and their Founders
We aim to find high-growth companies in New Zealand and support them with capital and advice (as required) and be easy to work with for founders. We do not insist on board seats, complex contracts or control when investing, but do look for appropriate governance and will take directorships when desired by both parties. We are able to act swiftly where required to agree and close investments, in particular follow-on investments.
Having a Low Rate of Investment Failure
We aim to invest in opportunities that have been significantly de-risked by displaying traits such as:
- a genuine end-user need and compelling products;
- existing, growing revenue (we have a strong bias towards companies of over $500,000 in annual revenue);
- an effective and efficient company with strong people and culture; and
- a robust financial investment case that allows the company to grow or return to positive cash-flow with investment.
Having a Long Life
We are a permanent capital investor and have a patient, long-term investment mandate. We aim to hold our investments for considerable periods of time in order to allow our Portfolio Companies to grow to maturity. Occasionally we may sell investments, although generally only after a founder-led decision.
Having a Strong and Diverse Portfolio
We aim to lower Punakaiki Fund’s market risk by having a well-diversified portfolio across company stages, industries, business models and markets.
Holding for Dividends
We aim to hold Portfolio Companies over the long-term to receive ever-increasing dividend payments.
In general we expect investments in Portfolio Companies that Punakaiki Fund has held and provided advice to the longest will show the greatest returns, while the newer investments take time to be materially revalued.