Punakaiki Fund, set up by Pacific Fibre co-founder and internet commentator Lance Wiggs, is seeking to raise up to $50 million to invest in early stage New Zealand technology, internet and design companies.
The fund registered a prospectus for an initial public offering of $20 million of shares at $1 apiece with oversubscriptions for a further $30 million.
Punakaiki will be managed by Lance Wiggs Capital Management, which is 66.7 per cent owned by Lance Wiggs and 33.3 per cent owned by Chris Humphreys.
Between 30 per cent and 60 per cent of the fund will be in "early growth" investments of between $200,000 and $2 million- helping businesses "move beyond a saleable, yet early stage product, to a more refined offering with an expanding pool of customers," the prospectus says.
Less than 20 per cent will be "turnarounds and transformations" with investment of up to $5 million. This could include stagnating businesses with promising technology but limited sales and marketing capability. "Seed investments" would also be below 20 per cent and would range in size from $20,000 to $200,000, to support "high-potential founders and enable companies to move from initial idea to prototype to very early sales."
Lance Wiggs Capital Management will be paid a management fee of 2 per cent a year, with a minimum of $300,000 and a performance fee based on a 20 per cent increase in the value of the fund above a benchmark 10 per cent annual growth rate, the prospectus says. The performance fee will be paid as 72 per cent in shares and 28 per cent in cash.
The fund has already attracted expressions of interest from 450 people with potentially $7.7 million to invest, according to its website. That suggests it will reach the $5 million minimum that Wiggs says is needed to start.
The shares will be able to be traded 'over the counter' via share registry firm Link Market Services, with the potential for a listing on the NZX, he said. The investment would be "very much a capital gain play" with no plans to make regular returns to investors.
"This is unashamedly a high risk, long-term capital return investment category, and we are not offering short-term dividend streams," he said. "We are confident in the number and quality of privately held high growth companies in New Zealand."
The offer is scheduled to open on August 30 and run until October 2.
The company's directors include Wiggs, former South Canterbury Finance chief executive Sandy Maier and former Bell Gully partner Wayne Hudson.