Search fund investors interested in New Zealand

searcher profile

November 29, 2020

by a searcher from University of Wisconsin - Madison in Tauranga, New Zealand

I'm exploring the possibility of establishing a search fund for an acquisition in New Zealand. I'm a dual US/NZ citizen currently living in the US, but returning to NZ in 2021.

Does anyone have insights about how to identify search fund investors who could be interested in such an acquisition?

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Reply by a professional
from Victoria University of Wellington in New Zealand
I've been working with searchers in New Zealand (and to a much lesser extent Australia) for the last couple of years as we discuss how to get traction in the market for this approach.

In short, the market has zero awareness of search funds, so there is an educational challenge. It is also capital short especially for mid market and early stage investments, so there is an investment gap too.

The business owners will probably be accepting of search funds being a form of PE, so I think that is fine as long as you can show funds backing up any offer. Also multiples are more reasonable than the US.

To date, no searcher has got "search" capital or "acquisition" capital. There is one searcher I know of that has essentially self funded his search and acquisition (from the US, Kiwi wife). Good investment so far I believe.

Australia is having some success, perhaps listen to my podcast (search for my name + "Search Funds in Australasia with Alexander Simmons") but it is still early days.

I would make contact with the international search fund of funds and pitch to them first. I'm not sure you can assume local funding. Something I'd like to change...but its a long term project.

Good luck Shaun! Happy to discuss and meet (no Covid19, thank god). I'm in Wellington.
commentor profile
Reply by a searcher
from University of Wisconsin in Tauranga, New Zealand
Thanks for your insights Bruce. I actually found your blog and podcast a couple of weeks back. I listened to the episode with Alexander, too. Good content. It helped advance my thinking in the NZ context, to be sure.

My preliminary research suggests a self-funded search might be most viable. I have a decent NZ network that I think I could then activate towards an acquisition fund, but that's just an assumption right now. Which leads to the original question of the general appetite of US-based investors making FDI in NZ. It seems that this is unheard of to date, but it would be good to get a signal to validate this either way.
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