To enable eligible investors to participate in the New Zealand private equity market Craigs Investment Partners and Direct Capital established the Pohutukawa Funds - a professionally managed private equity programme.
By pooling capital and engaging an experienced manager, a Fund is able to achieve the financial strength and investment expertise needed to successfully participate in private equity investment.
Individual investors typically do not have the time or the ability to identify or access investment opportunities in unlisted companies, or the resources to evaluate and monitor such investments. When investing with a Fund these roles are performed on behalf of investors in the Fund.
A Fund has the resources to build a diversified portfolio of investee businesses.
Investment through a Fund, enables investment into a much wider range and number of investments, thereby reducing overall risk.
The rationale for investing in Pohutukawa can be broken into five key themes. First, the current market environment presents appealing investment opportunities for private equity investors. Secondly, in the medium term private equity could benefit from the demand for succession planning. Thirdly, returns from private equity, over the medium to long term, have outperformed listed equities. Fourthly, private equity, and Pohutukawa in particular, can invest in a much wider range of investment opportunities outside listed equities, bringing important diversification benefits to portfolio investors. Finally, as private equity now forms an established and growing part of most institutional investors’ investment portfolios, it is equally appropriate for private investors.
Pohutukawa I
Established in 2004 with committed capital of $53 million. Pohutukawa I made 12 distinct investments. All investments have been realised and Pohutukawa I made its final distribution in October 2019.
Pohutukawa II
Established in March 2009 with committed capital of $82.5 million. Pohutukawa II has 2 remaining investments.
Investors hold both ordinary and redeemable preference shares in the Pohutukawa funds.
Investors also hold redeemable preference shares in each of the Pohutukawa investment companies, which make the investments in the portfolio companies.
As an example, the investment in the Pohutukawa II portfolio company Transaction Services was made through the investment company Pohutukawa Alpha. Pohutukawa investors hold redeemable preference shares in Pohutukawa Alpha.
These are called stapled securities. The number of ordinary shares on issue remains constant while the ratio of preference shares reduces as investments are realised and preference shares are redeemed.
Chairman and Independent Director
John is a Company director and trustee with more than 30 year’s experience in executive and management positions with the former Fletcher Challenge group of companies through to his retirement in 2001. He has considerable international experience in management, finance, corporate governance best practice and as a director and audit committee member of private and publicly listed companies. John is currently a director of Horizon Energy Distribution Ltd and Oriens Capital Ltd, and he is Chairman of both Pohutukawa Private Equity Ltd and Pohutukawa Private Equity II Ltd. John was previously a director of Air New Zealand for 9 years.
Director
Neil is the founding principal and Executive Chairman of Craigs Investment Partners, a New Zealand Exchange Participant Firm, a company he has been instrumental in building from a small regionally based sharebroking business in Whakatane to its current position as a leading New Zealand investment advisory firm. Craigs Investment Partners has approximately 500 staff across 19 branches throughout New Zealand. Neil has a broad experience in private equity transactions, stock exchange listings, capital raisings and corporate activity for a wide range of companies. In a personal capacity Neil has been an active private equity investor for many years. Neil is currently a director of Pohutukawa Private Equity Ltd, the first Pohutukawa fund, Pohutukawa Private Equity II Ltd, Pohutukawa Private Equity V Ltd, Pohutukawa Private Equity VI Ltd, Kowhai Private Equity, Karaka Private Equity, Matai Private Equity, Oriens Capital Ltd, Comvita Ltd and director of a number of privately held companies.
Director
Ken is Chief Financial Officer of Craigs Investment Partners. Ken is also a director of Pohutukawa Private Equity V Limited, Pohutukawa II Management Limited, Kowhai PE Management Limited, Karaka Management Limited, Matai Management Limited, Pilot Bay Funds Management Limited and a number of Craigs Investment Partners subsidiary and associate companies including QuayStreet Asset Management Limited, Custodial Services Limited, and Craigs Investment Partners Superannuation Management Limited.
The Pohutukawa funds have engaged Pohutukawa Management to provide day to day administration and investment management services.
The Manager is a 50/50 joint venture between Direct Capital and Craigs Investment Partners and will draw on the expertise of both its shareholders.
The Manager has an Investment Committee which is responsible for all investment and divestment decisions for Pohutukawa after reviewing detailed evaluations prepared by the Direct Capital investment team. The Investment Committee comprises three representatives from Direct Capital, two representatives from Craigs Investment Partners, and an independent director of Pohutukawa Private Equity.
Peter Lalor from Craigs Investment Partners is the executive officer for the Pohutukawa funds and managing operations and looking after investor relations.
To contact the Manager please see details in the Contact Us section.
Pohutukawa I
All investments have been realised and the final distribution to shareholders was made 25 October 2019.
Pohutukawa II
The initial public offering for shares in Pohutukawa II closed on 27 February 2009.
The initial subscription commitment was $1, paid to 10 cps. On 18 December 2014 the capital commitment was capped at 80 cps.
The shares are paid to 62 cents.
Gross distributions totalling $1.10 have been returned to shareholders to date.
Closing price 31 March 2020 12.5 cents (est. NAV)
Post the 22 April 2020 distribution the estimated NAV was 5.0 cps, after allowing for manager's earnout.
Pohutukawa V
The initial offer for shares in Pohutukawa V closed on 19 December 2016.
Pohutukawa V shares are currently paid to 70 cents. The initial capital commitment was $1 per share.
Gross distributions totalling 16.1 cps have been returned to shareholders to date.
Closing price 31 March 2020 54.8 cents (est. NAV)
Estimated NAV as at 31 March 2020 (Unaudited) 54.8 cps
While Pohutukawa shares will not be quoted on a registered stock exchange, Craigs Investment Partners facilitates a secondary market for willing buyers/sellers of Pohutukawa shares.
Guidelines for buying/selling Pohutukawa shares are:
To sell Pohutukawa please:
To buy Pohutukawa please contact your investment advisor and advise the number of Pohutukawa shares you seek and your bid price:
