The entrepreneur behind a new private equity fund hopes a $20 million injection from the Government's venture investment fund will help it to attract investors from the US and Asia.
The NZ Venture Investment Fund yesterday said it would co-invest the money in Endeavour Capital's growth fund.
Endeavour chairman
Neville Jordan, the founder of MAS Technology, said the commitment was significant.
He hoped it would pave the way in helping to raise a further $100 million to $150 million from New Zealand investors and US$270 million overseas.
"I can't stress the importance of this. It will be seen as a very good signal from offshore," he said.
It is the second time Endeavour has been given money to invest in small and medium sized enterprises.
In 2003, the New Zealand Venture Investment Fund put $15 million towards its investment fund which managed to raise a total of $40 million and is now fully invested in local companies.
The growth fund is its third private equity fund since the company launched in 1999.
But Jordan said there was no doubt the world had changed a lot since then.
"It is tough. However, all of the institutions still have cash coming in every week and they have to do something with it. They can't keep putting it in the bank."
Jordan said there was no shortage of investment opportunities in New Zealand, particularly in the small and medium sized company sector where there were high growth opportunities and it had a pipeline of companies lined up.
The fund would close off the first part of its capital raising mid-way through the year and then have a final close by the end of this year.
It would then start investing from mid-way through the year into companies in the clean tech, energy efficient, alternative energy, software and life science sectors.
The money raised in New Zealand would be used to invest in New Zealand companies while the overseas investment would be used to help bring in intellectual property which could be developed here and then sent overseas.
He said the ultimate aim was to create more jobs in New Zealand. "The companies we will focus on are creating the highly productive jobs which New Zealand needs to generate."
