Direct Capital to launch NZ$350m fund

The Auckland firm has also acquired a 45 percent stake in New Zealand King Salmon, the country's largest aquaculture company.

New Zealand-focused private equity firm Direct Capital is set to begin raising capital for a NZ$350 million ($234 million; €165 million) fund for investments in New Zealand’s mid-market.

It will make growth capital, pre-IPO and buyout investments in companies with enterprise values of between NZ$30 million and NZ$150 million. While the firm does not maintain a sector focus and invests across broad themes, a number of its investments have been made in the food sector, a traditionally strong industry in New Zealand, Direct Capital managing director Ross George told PEO.

The firm is currently investing out of Direct Capital Partners III, a NZ$130 million fund. It has just

Ross George

acquired a 45 percent stake in New Zealand King Salmon Company in partnership with the company’s management. The stake was acquired from Tiong Group, a Malaysian company with interests in forestry, property and media.

The size of the investment has not been disclosed, but according to a source, Direct Capital is will take a stake of approximately 40 percent for about NZ$30 million, and the management will have a stake of 5 percent in the company.

New Zealand King Salmon Company was established in 1996 with the privatisation and merger of the country’s two largest salmon companies, Southern Ocean Seafood and Regal Salmon. It is currently New Zealand’s largest aquaculture company and the world’s largest farmer of the Chinook species of salmon. The company operates six sea-farms, two hatcheries and four processing factories.

The investment, which will be used to expand the company’s activities, is the firm’s ninth from its current fund. It has deployed about 75 percent of the fund’s capital, said George. The remaining capital will be used for one more investment and for funding add-on acquisitions made by its existing portfolio companies.

Established in 1994, Direct Capital manages more than NZ$440 million across seven funds. It has an investment team of 13.