Leading questions: Mark Francis

Mark Francis of Augusta Capital.

Mark Francis, managing director of NZX listed Augusta Capital, gives his take on the year ahead.

What is 2017 looking like for your business?

I am a strong believer that the NZ story on the global stage is only just beginning. The political and social upheaval that we saw internationally in 2016 has turned NZ's isolation from our biggest weakness to our biggest strength. As the world becomes a more unsettled place we will continue to see a flow of financial and intellectual capital into NZ from the US and Europe. We are the jewel at the bottom of the world.

How does that compare to 2016? How did last year shape up for you and your staff?

We have had a very big few years of growth at Augusta with our funds under management growing from around $300 Million in 2013 to over $1.6 Billion now with the year to March 2016 delivering a record profit for the company. Our staff numbers have grown from 6 to 30. That in itself presents obvious challenges but we have a great team who are fully invested in our journey and are enjoying the ride.

What are the issues affecting your industry and what impact are these likely to have over the next 12 months?

The end of 2016 saw some fairly dramatic changes on a political level both internationally and locally. From Brexit, to Trump to the resignation of John key, these events reiterated to investors around the world that the unexpected can and does happen and you need to ready for change at any time and change can come very suddenly and without warning. In a business sense the most dramatic factor for 2017 is likely to be the near unprecedented rise in wholesale interest rates and the drying up of available bank funding that we have seen in the last quarter of 2016 that will carry over into this year. We still believe thihs year will be a positive one for New Zealand business but for us (and indeed any property investor) the cost and availability of debt will certainly have an effect on the market. Anyone who is well capitalised and has strong banking relationships - which Augusta is and does - will find it a period of real opportunity in my view. Our business model is evolving and we are no longer just a buyer of investment assets but now also a creator of them. We now can and will get involved in the funding and/or development of investment grade assets across all property sectors (including residential) to create high quality investment property that we can make available to our investors.

Going into an election year, what are the three biggest issues the Government needs to solve?

Housing. Crime. Education. Augusta is keen to help solve the first issue.

What role does the business community have in tackling these problems?

While businesses' tax contributions are obviously significant in terms of running a country, we need to think of ourselves as a lot more than just tax payers and job providers but as role models and example setters in the way we conduct ourselves. The GFC period presented a corporate greed side of business that understandably turned people against business. Collectively, we need to turn that perception around.