The private equity investment arm of KiwiSaver provider Booster has invested more than $10 million into buying a 42 per cent stake in Katikati-based avocado grower and exporter Darling Group.
Booster, which has around $3 billion invested in its KiwiSaver scheme and is the 10th largest provider, is one of the few KiwiSaver schemes which invests in unlisted private companies through its Tahi LP fund.
Private company investment offers the potential for higher returns but are also a less liquid investment as their shares are not traded on a public market making it harder to sell out quickly.
Tahi already owns a number of wineries, as well as having stakes in Sunchaser Avocados, Dodson Motorsport and financial services company Lifetime.
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Duncan Wylie, general manager strategic development at Booster, said it was attracted to Darling Group as an investment because of its vertical integration strategy.
The company supplies produce to both the local and international markets and works with growers in New Zealand, Australia, the US, Mexico, Chile and Peru as well as growing avocados, kiwifruit, blueberries and citrus itself.
It owns Just Avocados - New Zealand's third largest avocado exporter, JH Leavy & Co - a produce wholesaling and logistics company in Brisbane as well as Zeafruit - a marketer of avocados and citrus to New Zealand retail outlets.
Wylie said when compared to others in the avocado industry Darling Group's model was unique and offered Booster the ability to invest across the supply chain.
"It's an opportunity to invest in a New Zealand company doing what they do best and help them to grow."
Booster's investment will allow Darling Group to invest further into the development of its supply chain infrastructure and capability and accelerate its New Zealand avocado orchard development plans.
Andrew Darling, managing director of Darling Group said: "Bringing in an external investor is a strategic decision to facilitate our continued growth and will enable us to continue our pathway of a fully integrated business in the international horticulture industry."