Viking's Brent King (right) says IRG, run by David McKewen (left), has good potential. Photo / Dean Purcell
Viking's Brent King (right) says IRG, run by David McKewen (left), has good potential. Photo / Dean Purcell
KEY POINTS:
There is no shortage of self-belief among New Zealand entrepreneurs right now, says Viking Capital executive chairman Brent King, who has looked at more than 60 investment opportunities in the past six months.
He told a special meeting of shareholders yesterday: "You will not believe how many peoplehave emailed me and said 'our business is just like 42 Below, could you float me too and raise $50 million'."
Many of the listing hopefuls - from boutique beer and liquor companies to software developers - had unrealistic expectations of what a brand was worth, King said.
But despite the fact that he would not be investing in most of them, King was not prepared to laugh them off.
"The brokers laughed at 42 Below when the idea was first pitched," he said.
The sale of the spirits company to Bacardi last year for $138 million helped Viking - a major shareholder - to deliver a profit of $1.6 million in its first six-month result to September 30 (actually just a four month period since it listed in June).
That profit included writing off the float costs and the company was on track to deliver returns of more than $2.4 million for the full year.
Now the investment company is on the hunt for the next 42 Below - and there is no shortage of contenders.
"If anything, there are too many people trying to find us," King said. "We have to work our way through those investment propositions and look at our options."
But it was positive for the market that there was such high levels of confidence and enthusiasm.
He put that down, in part, to the high profile success of 42 Below founders Geoff Ross and his partner Grant Baker - now a director with Viking Capital.
King yesterday said Viking's third major investment since listing (it holds stakes in biotech company ICP BIO and finance company Dorchester Pacific) would be the purchase of Investment Research Group, the boutique research and funds management company run by former journalist David McEwen.
Viking will pay $2.5 million: $1 million Viking shares, the rest in cash.
McEwen had a good name and an excellent track record, King said.
He had a strong network of clients for his research and an increasing number for whom he managed funds. There was scope to develop the business as a niche player, King said.
