We are pleased to advise that Waterman Fund 4 LP, together with the other shareholders, has entered into an unconditional contract with Australian private equity investor, BGH Capital (BGH) to sell 100% of Fusion5 Group Holdings Limited (Fusion5). Aside from those retiring, all Fusion5 management shareholders have rolled a portion of their proceeds back into Fusion5, indicating their strong belief in Fusion5’s growth prospects.

The combination of operating in a large and growing essential industry, quality team, high recurring revenues and dividend flow, long history of organic growth and a strong M&A pipeline have all been very attractive investment attributes underpinning the Fund’s investment in Fusion5.

Some of the key investment highlights achieved during Waterman’s involvement with Fusion5 are as follows:

• Successfully positioning the Group as a scarce independent Australasian IT services platform of scale
• 92 percent growth in annual revenues to approximately $200m
• More than doubling earnings
• Growth in staff numbers from circa 440 at the time of investment to over 700
• The successful completion and integration of seven strategic acquisitions in both Australia and New Zealand
• Recognition as a top 1% Microsoft Partner and top 5 Oracle Netsuite Partner globally
• Increasing the number of management equity holders in the Group by 17
• Significantly enhanced financial reporting and analysis functions
• Receipt of a high level of recurring dividend flow.

BGH is one of the largest private equity firms operating in Australia and will be a strong new partner for Fusion5 as it continues to build out its platform in Australia and beyond. We wish Fusion5 and BGH every success on the next stage of the journey.

Waterman invested in leading courier and express freight operator PBT in 2017.

PBT has sold its Courier Business to NZ Post and this transaction has been approved by the Commerce Commission.

The transaction is now unconditional, and completion is scheduled for the 4th of June. 

The PBT team will be supporting customers to ensure a smooth handover of their relationship to NZ Post.

PBT Group Chief Executive Dave Lovegrove says, “NZ Post is well positioned to take on the parcel delivery side of our business, allowing us to continue focusing on our core offering of Express Freight, Container Cartage, Air & Ocean and logistics business operations.” 

We are pleased to advise that Waterman Portfolio company, New Zealand Clinical Research (NZCR), has acquired New Zealand’s largest and fastest growing provider of late phase outpatient clinical trial research, Optimal Clinical Trials (Optimal).

Founded in 2013, Optimal provides phase 1b to phase 3 outpatient clinical trial research in NZ. It was founded by Dr Barney Montgomery and Dr Penny Montgomery, who were joined by General Manager Dr Liz Smaill in 2015. Over the course of a decade, Optimal has developed a strong reputation for high quality trial research with market leading participant recruitment and retention. Optimal is particularly active in therapeutic areas such as Infectious Disease, Metabolic, Dermatology, Gastroenterology, Rheumatology and Urology.

The Optimal shareholders, who are all practicing clinicians, received a mixture of cash and shares in NZCR as consideration for their shares in Optimal and one of its Founders, Dr Barney Montgomery, has joined the NZCR Board. NZCR’s investment in Optimal fast tracks NZCR’s growth strategy of expansion into later phase trials and vaccine studies. It provides access to experienced personnel and provides an immediate platform for NZCR to enter these areas.

Notwithstanding considerable the complementary nature of the acquisition, Optimal will be operated a separate division within the NZCR Group structure.

We are pleased to welcome the Optimal team to the Group.

Waterman has acquired a majority stake in Crocker Group Limited (Crockers), with the existing shareholders retaining a minority stake.

Crockers was founded in 1971 as a property management company, with the body corporate business added in 1985. Since then, Crockers has steadily grown to become a market leader managing more than 25,000 body corporate units and residential properties.

Matt Riley and Andrew Fredericks will join the Crockers board to represent Waterman’s interests. The Crockers senior management team will be led by recently appointed CEO, Darren Powell. Darren has over 20 years experience in property and body corporate management within NZ and the UK. He is well supported by an established and highly capable senior leadership team.

The key attractions for Waterman included Crockers reputation as the leading body corporate and residential property manager in Auckland, as well as a unique exposure to NZ’s largest asset class, residential property, and the growth required to address New Zealand’s housing shortage.

For further information refer to https://www.crockers.co.nz/

Trans-Tasman reseller and NetSuite partner Fusion5 announced the acquisition of Sydney-based MSP and Microsoft partner Vigilant.IT.

Founded in 2006, Vigilant.IT has over 60 managed services customers and works across the manufacturing, financial and insurance services, and government sectors. The transaction marks the second acquisition in two months after Fusion5 acquired NetSuite solution provider Liberate IT in May. It will see Vigilant.IT’s entire team of over 20 consultants and engineers join Fusion5’s enterprise cloud and security (ECS) practice.

Fusion5 general manager of ECS Kris Jackson said the acquisition of Vigilant.IT will grow Fusion5’s ECS practice across Australia and NZ to over 70 people. “Vigilant.IT has a highly skilled and passionate team with significant infrastructure, security, networking, and Microsoft Modern Work expertise,” said Jackson. He highlighted that Vigilant.IT were the first Australian company to achieve Microsoft’s Gold Security Competency in 2019.

“The new combined skillsets, and the addition of another Microsoft MVP (Most Valuable Professional) to our business, will also strengthen our managed services offerings across our Australia and New Zealand customers. And with Vigilant.IT’s dedicated service desk capabilities we can enhance our end-to-end IT support across the board.”

Vigilant.IT owner and head of technical operations Tom Ward said his company chose to become part of Fusion5 as they offered a clear path forward for our customers and people. “Stephane (Vigilant.IT co-owner and director innovative solutions Stephane Budo) and I have always fostered a strong learning environment within the company and needed more opportunities for our team to shine in their chosen field,” Ward said.

“And that meant finding ways to grow and work in the areas we’re passionate about - and providing our customers access to a wider range of innovative business solutions. Fusion5 offered us that,” Ward added.

Fusion5, an Australasian business solutions company and Oracle NetSuite Solution Provider, today announced the acquisition of Liberate I.T. Founded in 2011 by a team with extensive ERP experience, Liberate I.T. is a NetSuite Solution Provider that serves over 120 customers with 30 employees across six Australasian locations.

“Combining our companies makes sense,” said Jim Brodie, an owner and director of Liberate I.T. “It provides additional capability and support for our customer base and exciting opportunities for the Liberate I.T. staff.”

“Acquiring Liberate I.T. is part of an ongoing growth strategy for the business,” said Grant Robertson, executive director – NetSuite and corporate performance management, Fusion5.  “We’re very excited about Liberate I.T. joining forces with us. Our combined resources and NetSuite expertise will provide new and existing customers with even more services and support.”

Robertson says that the geographical overlap of the two businesses will see Liberate I.T. team members join Fusion5 in its Auckland, Wellington, Christchurch, Brisbane, Sydney, and Melbourne offices.

The purchase and transition of all Liberate I.T. staff and customers to Fusion5 is effective from May 1, 2023.

Sunday: https://www.1news.co.nz/2023/03/19/kiwi-liver-specialist-on-brink-of-cure-for-rare-genetic-disease/ 

Professor Ed Gane is on the cusp of curing a deadly hereditary disease which has ravaged generations of families. 

Hereditary amyloidosis is a rare genetic disease that causes liver cells to produce an abnormal protein which accumulates in the body, causing damage to the heart, nervous system and gut.

The first symptoms appear in those aged between 20 and 40 and are fatal within 10 years.

Heartbreakingly there's a 50/50 chance you can hand it on to your children.

It impacts around 50 New Zealand families and it is very likely Gane knows all of them.

He's with them as they're diagnosed, he speaks to their families, helps them through liver and heart transplants and holds their hands as the disease takes its ultimate toll.

Two years ago, Gane was offered the opportunity to conduct the first human trial of an extraordinary new medical technology which allows scientists to target and edit faulty genes in DNA.

CRISPR (clustered regularly interspaced short palindromic repeats) is a natural process found in bacteria, which has evolved to protect them from viruses.

CRISPR gene editing is being hailed as a lifesaving medical breakthrough, but some feel it leaves the door open for scientists to create super humans free of undesirable traits.

"Gene editing brings huge opportunities for medicine, but also big challenges, both morally and ethically," Gane said.

"New Zealand has incredibly strict, regulatory and ethical guidelines on how we can develop CRISPR. I think this is a huge advance in medicine and it can fill medical needs for people who have untreatable conditions. That's really where we should be using this new technology."

Gane's international standing and our low rate of Covid infections during the early days of the pandemic meant 12 of his amyloid patients were the first in the world to benefit from this new research.

It sounds like something out of science fiction — but it's real and it’s here.

A three-hour infusion of a drip containing the gene editing treatment binds itself to cells inside the liver which find the gene that produces the abnormal protein.

Molecular scissors then cut out the faulty gene and DNA naturally fuses back together.

Once it's gone, the liver cells will no longer produce the abnormal protein.

Nobody knew how successful this trial would be, but two years on, early results suggest all participants will be cured of this fatal disease and that means real hope for the children of the people who carry the amyloidosis gene.

"It's miraculous," Gane said.

"Not only does it provide a potential cure for everyone living with hereditary amyloidosis, but it could also provide a cure for the tens of millions of people living with other inherited lethal diseases."

Three other CRISPR trials are underway at New Zealand Clinical Research's campus, which makes Auckland one of the largest gene-editing centres in the world.

Leading life insurer Partners Life has evolved from start-up to a market leader in the NZ life market in just 12 years, with global life insurance specialist Dai-ichi Life Holdings, Inc today announcing its acquisition of 100% of the shares in Partners Group Holdings Limited, the parent company of Partners Life Limited.

The acquisition values Partners Life at circa NZ$1bn and is subject to customary conditions including required regulatory approvals. The transaction is expected to settle in Q3/Q4 of FY23.

Founded in 2010, Partners Life has grown to be one of the leading life insurers in New Zealand. Its success has been rooted in its commitment to creating high value, innovative and personalised solutions for customers and in advocating for the value of independent advice in supporting New Zealanders to get the right protections in place.

Dai-ichi Life is fully committed to Partners Life remaining a stand-alone New Zealand business with Managing Director, Naomi Ballantyne and her current Executive team staying on board to lead the company into its new future, meaning it will be business as usual for customers, advisers, and staff.

Partners Life Chief Executive Officer Naomi Ballantyne added, “I am absolutely delighted at our new partnership with Dai-ichi Life. I have for a long time admired the impact that Dai-ichi Life ownership has had on the TAL business in Australia, believing that it would also be an excellent future owner for the Partners Life business. I believe under Dai-ichi Life ownership, Partners Life will be in very good hands. This transaction also represents a positive outcome for our supportive shareholders. Our shareholders have collectively been the backbone of Partners Life’s growth over the last decade, and we are so thankful for their support and guidance. I am excited for the future of Partners Life and looking forward to leading Partners Life into this next chapter, taking full advantage of the new opportunities that Dai-ichi Life ownership will bring.”

Mr. Seiji Inagaki, President and Representative Director of Dai-ichi Life Holdings, Inc. says, “Partners Life has established a solid market position, strong customer base, and an impressive track record of growth. This is a compelling opportunity to build on Dai-ichi Life’s overseas strategy. We have confidence in the Partners Life management team and staff to continue to deliver outstanding value to its customers and their advisers.”

New Zealand’s leading specialty grocery retailer, Farro Fresh, is pleased to announce it has completed a capital raise to accelerate the company’s growth initiatives. The company can also now reveal the location of its seventh store at the Smales Farm commercial hub in Takapuna.

Since Farro founders Janene and James Draper opened the first store in Mt Wellington in 2006, the company has championed many of New Zealand’s best-known food, beverage and grocery products from start-up phase through to category leading brands. Farro stores and Farro.co.nz showcase the best of New Zealand fine foods and also provide an essential platform in the country’s food ecosystem for companies to develop and introduce new products to the retail market.

Always local first, the company is proud to support more than 500 artisan suppliers whose products are carefully selected for quality, taste, value and sustainability. Continuing to grow its exclusive supplier base is a key growth initiative for the business.

Farro will use the investment to:

• Expand network growth through the addition of new stores;
• Refurbish and expand the current stores;
• Improve systems to support growth and further enhance the customer experience;
• Support other identified growth initiatives.

Janene Draper says, “since starting Farro over 15 years ago, we have sought to provide fresh, high-quality food and service, providing our customers with a trusted place to discover and shop for delicious food every week. With greater demand from customers seeking the superb shopping experience at Farro, we are delighted to announce the location of the company’s seventh store at Smales Farm in Takapuna”.

Farro’s new store will be a greenfield development on the northern corner of the Smales Farm site and is expected to open in 2023.

Janene and James Draper and the existing Farro management team have partnered with local private company investor, Waterman Capital, to provide the growth capital to support the next phase of this New Zealand success story.

James Draper says, “we have a number of exciting growth plans ahead of us and it has been refreshing to work with a like-minded New Zealand based investor that shares Farro’s core values and vision”.

About Farro Fresh

Farro is a New Zealand owned and operated business, founded in 2006 by Janene and James Draper. The duo had a desire to create a retail space that showcased the very best and finest of New Zealand food. The foundations of the Farro brand were formed in a storefront on Lunn Ave, Mt Wellington. What was then just a team of 12 has now grown to over 400 in 6 different stores across Auckland – Epsom, Grey Lynn, Mt Eden, Mt Wellington, North Shore and Orakei.

Intermediate Capital Group has acquired Waterman Private Capital’s (Waterman’s) interests in Canopy Healthcare Group (Canopy).

Canopy is a significant private healthcare organisation in New Zealand offering diagnostic imaging, medical oncology and drug compounding services. Canopy is a leading imaging provider and the only multi-clinic cancer care provider within New Zealand. Canopy’s integrated, patient-centric healthcare platform provides a complementary offering to the public sector and provides New Zealanders with access to first-rate private healthcare.

Since Waterman’s investment in December 2018, the company has transformed from a diagnostic imaging only provider, to a broader healthcare organisation and has materially increased both revenue and earnings. Some of the highlights under our ownership included:

• Doubling annual revenues;
• Increasing the number of doctor shareholders from 7 to 35;
• Merging with Canopy Cancer Care, New Zealand’s largest private medical oncology business;
• Purchase of a 80% stake in drug compounding business iMIX;
• Increasing service capacity, including doubling of doctor pool and extended clinic hours

We would like to thank all of the other Canopy shareholders for their support and, in particular, the management team led by CEO Tony Moffatt.

Empyreal are recognised as leading providers of Citrix and Microsoft services and solutions and have significant business consulting experience across sectors including private, government, education, and defence. In addition, Empyreal staff maintain Australian Government security clearances governed by the Department of Defence.

Kris Jackson, General Manager of Managed Services for Fusion5 Australia, says, “We are delighted to welcome the Empyreal team to Fusion5. We’ve had a close relationship with them for almost a decade, and over that time, they’ve worked seamlessly with us to provide Citrix support for our customers, while managing over 70 of their own clients.

Empyreal is a Gold Citrix Solution Partner with a raft of certifications so bringing them into the Fusion5 family extends our capabilities, competencies, and capacity, and opens up the world of Citrix solutions to our customers and us. As they’re already a Microsoft Gold Partner, there are numerous existing synergies, and shared competencies and experience to leverage. We see it as a win-win for everyone with new (to us) business solutions, new opportunities for our customers, and more variety and fresh challenges for the Empyreal team.” 

Mark Montgomery, Co-director and Founder of Empyreal, says, “We have had a long and happy relationship with Fusion5 and their customers, so it’s a natural step for us to align our culture and capabilities with theirs. They are a well-respected and trusted name in the technology industry. We are confident their expertise, innovations, and experience across a wide range of industry-leading solutions will be of considerable value to our customers. It’s an exciting time for our team and customers alike.”

Daniel Marsh, Co-director of Empyreal, says, “Having worked on Citrix solutions with Fusion5 for a number of years, the opportunity to take Empyreal's existing Citrix practice and grow it nationally and internationally under the Fusion5 banner is very exciting. I'm very much looking forward to the journey.”

Leading early childhood education and care provider Busy Bees Early Learning Australia (Busy Bees Australia) today announced the acquisition of New Zealand based Provincial Education Group (Provincial Education) and completed the acquisition of Australian childcare provider Think Childcare Group (Think Childcare).

Busy Bees Australia is the wholly owned Australian and New Zealand operations of Busy Bees Group, the leading globally diversified operator in the early childhood education and care sector. Founded in 1983 and headquartered in the UK, Busy Bees Group is majority-owned by Canadian-based Ontario Teachers' Pension Plan and cares for over 75,000 children.

The acquisition of Provincial Education from majority shareholder Waterman Private Capital, Ascentro Capital and its founders marks Busy Bees entry into New Zealand, and is expected to complete at the end of October.

With 75 centres and more than 5,500 places in locations across the North and South Islands, Provincial Education is the third largest early childhood education provider in New Zealand. Busy Bees is pleased that Provincial Education’s experienced management team will be joining Busy Bees. Additional details of the transaction are not disclosed.

Provincial Education Chief Executive Officer Leanne Mortlock added, “It’s been a tremendous journey, with the support of Waterman, our founders and other investors, to build Provincial Education into one of the leading childcare and education operators in New Zealand. With Provincial Education now joining the Busy Bees Group, I can’t think of a better organisation with a global reputation for integrity, values and standards, to be aligning ourselves with. I am looking forward to working with Robert to continue to drive our growth and success.”

In addition to the acquisition of Provincial Education, Busy Bees also announces the completion of the Think Childcare acquisition, which encompasses 71 centres and more than 7,100 places across most of mainland Australia.

Commenting on the acquisitions and the continued business growth, Chief Executive Officer of Busy Bees Australia & New Zealand Robert Hughes said, “Our global mission is to give children the best start in life. It is great step to be welcoming Provincial Education into the Busy Bees family as our first expansion into New Zealand. It is clear we have a shared commitment with the Provincial Education management team to providing the highest quality care and education, and a strong alignment around values.”

“Think Childcare is a high-quality business and offers Busy Bees a compelling opportunity and platform for growth, while continuing to strengthen our global portfolio and bring further talent into the Busy Bees business. We are delighted to welcome the families, the staff and most of all the children into the Busy Bees family.”

 “Since Busy Bees entered this region back in 2018 we have continued to invest in our footprint through new centre openings and acquisitions across Australia and now New Zealand. We have a clear ambition of continued growth underpinned by the financial strength of the Busy Bees Group. The Provincial Education and Think Childcare acquisitions allows Busy Bees to support more children, families and staff than ever before.”

Since the initial acquisition of Foundation Early Learning Limited in June 2018, Busy Bees Australia has grown via a combination of acquisitions and the continued opening of greenfield centres. At the end of October the group will comprise 222 centres across Australia and New Zealand, making it one of the largest private childcare operators in the region.

Busy Bees Group Chief Executive Simon Irons added, “'Busy Bees entered the region with an objective to become one of the top early years education providers in Australia focused on community based centres. We continue to back a strong local management team, led by regional CEO Robert Hughes, and I am delighted that with the acquisitions of Provincial Education and Think Childcare we take a significant step forward towards realising this ambition.”

Busy Bees Australia currently has 87 per cent of its services rated as meeting or exceeding the National Quality Standard (NQS) and continues to focus on improving quality standards across the network. This focus on quality is driven by the high standards of the Busy Bees Group which has been involved in the delivery of early learning services for nearly 40 years, and requires all its centres around the world to maintain the highest standards in care and safety and provide exceptional early years education.

New Zealand Clinical Research (NZCR) is excited to officially welcome the Lipid & Diabetes Research Group (LDRG) to the NZCR Group. LDRG is a leading medical research group headed by Professor Russell Scott and based in Christchurch, New Zealand. Professor Scott’s specialties include diabetes, endocrinology, metabolic disorders and lipidology. 

As globally renowned experts in their field, Professor Scott, Principal Investigator, Dr Jane Kerr and the LDRG team have 30+ years experience and have completed 200 + clinical trials. NZCR have previously worked together with LDRG on several important research programs. This union strengthens NZCR’s clinical research expertise in metabolic disease and complements our reputation for delivering world class research in the areas of Liver (NASH) and Nephrology. 

With some pivotal studies underway and more on the horizon, we look forward to working together as NZCR in the future.

Fusion5 today announced it has won the 2021 Microsoft New Zealand Partner of the Year Award. The company was honoured among a global field of top Microsoft partners for demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology. 

Rebecca Tohill, Fusion5 Chief Executive, says the award recognises its commitment to using Microsoft technologies to enable its customers to thrive and transform in these challenging times. “Our Microsoft practice is considerably younger than many in the New Zealand market however we believe our timing has been perfect and from the outset we’ve maintained a relentless focus on business outcomes. We take huge pride in being a partner that delivers what we promise – integrity and business success. The Partner of the Year Award singles us out not only for attracting outstanding customer feedback, but demonstrating a strong track record of growth. You don’t grow in an economy and country like ours, where word-of-mouth is so powerful, without being very good at what you do.”

The Microsoft Partner of the Year Awards recognize Microsoft partners that have developed and delivered outstanding Microsoft-based solutions during the past year. Awards were classified in various categories, with honourees chosen from a set of more than 4,400 submitted nominations from more than 100 countries worldwide. Fusion5 was recognised for providing outstanding solutions and services in New Zealand. 

“I am honoured to announce the winners and finalists of the 2021 Microsoft Partner of the Year Awards,” said Rodney Clark, corporate vice president, Global Partner Solutions, Channel Sales and Channel Chief, Microsoft. “These remarkable partners have displayed a deep commitment to building world-class solutions for customers—from cloud-to-edge—and represent some of the best and brightest our ecosystem has to offer.”

Since starting its Microsoft consultancy in 2016, Fusion5 has won multiple awards for a range of projects and has been named to the exclusive Microsoft Business Applications Inner Circle for four years running. Kristy Brown, Fusion5 Director for Customer Engagement and Collaboration, attributes Fusion5’s success to the business’s strategic commitment to move away from a traditional IT provider doing what’s instructed to one that has thought-leadership and advisory and its core. “We invest in outstanding people so we can deliver the best quality Microsoft solutions in the most innovative way. Our Microsoft visionaries are charged with keeping our delivery consultants abreast of the very latest technology developments, so we can dedicate ourselves to continuously improving our customers’ solutions.”

Fusion5’s Microsoft practice across its nine offices in New Zealand and Australia has nearly 50% of its 500 plus staff engaged in Microsoft solutions, and rising.

My Food Bag is debuting on both the NZX Main Board and ASX today. The listing makes My Food Bag the biggest IPO in New Zealand by amount raised since 2014.

The initial public offer was strongly supported with applications being scaled in the Institutional and Broker Firm Offers, as well as in the Foodies Offer. My Food Bag’s foodies received an allocation preference, meaning less scaling of applications across this customer and staff group.

Thousands of Kiwi retail investors now join the existing shareholders, who have retained an approximate 25% stake in the company post-IPO, as well as a broad range of New Zealand institutional investors, including Milford Funds Limited, Harbour Asset Management Limited and Investment Services Group Limited (the owner of the independent fund managers, Devon Funds Management Limited and Clarity Funds Management Limited).

The majority of shares have been bought by New Zealand investors, with solid support from selected offshore institutional investors as well.

Tony Carter, My Food Bag Chairman, says: “I would like to welcome all of our new shareholders to the My Food Bag family. We are particularly delighted to welcome so many of our customers as shareholders following their participation in the Foodies Offer.

“Today marks the culmination of eight years’ work. We’ve grown from a Kiwi start-up beginning life on the kitchen bench to becoming a New Zealand food powerhouse, inspiring thousands of Kiwi families to eat better each night of the week.

“On behalf of the My Food Bag Board, I want to thank our team for their dedication through this demanding process and we look forward to the future,” says Mr Carter.

Looking ahead, the company plans to offer further recipe choice across more products.

Kevin Bowler, CEO of My Food Bag, says: “Since our inception, we have a proven record of successful growth, consistently bringing exciting products and recipes to market that cater to New Zealand’s changing consumer food, demographic and societal trends.

“Every week we receive thousands of recipe reviews that add to our expansive knowledge of what Kiwis love to eat. With feedback from our database of approximately 300,000 customers we continue to keep on top of what inspires Kiwis in the kitchen.

Since its inception in 2013, My Food Bag has developed and launched a series of new ground-breaking products.

The business launched Bargain Box in 2016, expanding its reach to even more New Zealanders. In 2017, My Food Bag leveraged its strong nutritional foundation and expertise to launch Fresh Start, helping Kiwis achieve their weight loss goals.

The company then became the first meal-kit business to introduce ready-made meal options in 2018. The following year it launched My Plant Based bag, another goal-based offering helping Kiwis discover vegan recipe options.

During 2020 My Food Bag developed operating protocols enabling it to operate safely from its three assembly centres across New Zealand as an essential service in all COVID-19 alert levels. The company has helped many Kiwi families stay isolated when they needed to with its contactless delivery service.

“In a week where two of our three assembly centres are operating under alert level three protocols, we can clearly see the resilience in the business and that we are well placed to keep supporting the growing number of New Zealanders who prefer to buy their food online,” says Mr Bowler.

My Food Bag operates within the massive $37 billion New Zealand retail food market and has delivered more than 85 million meals since the business began trading in 2013.

The My Food Bag brand has a high level of awareness in the meal kit market at 88% and has experienced a significant uplift in active customers during FY21 YTD.

A recent customer survey revealed 85% of customers either like or love the brand and this is something that management feels can become even stronger with the support of more Kiwi shareholders invested in the company.

About My Food Bag

My Food Bag is New Zealand’s longest standing meal kit provider and is a well-loved and successful New Zealand brand. Each week My Food Bag delivers thousands of bags full of fresh, tasty and locally sourced ingredients along with easy-to-follow recipes direct to families across New Zealand so that they can create nutritious meals in their homes.

Since inception My Food Bag has been intensely focussed on developing healthy and delicious recipes, product innovation and exceptional customer service. This has resonated with New Zealand consumers and My Food Bag has delivered over 85 million meals to Kiwis since the business began trading in 2013. My Food Bag offers a variety of products under the My Food Bag, Bargain Box, and Fresh Start brands and most recently has entered the ready-made meal market with the MADE brand.

My Food Bag operates in the fast-growing online food delivery market. The business’ extensive database, high brand awareness, digital capabilities and nationwide provide a strong platform for growth in this market, as well as an opportunity for expansion beyond food.

Fusion5 has completed the acquisition of a highly-regarded Microsoft practice, Topaz Solutions.

Topaz has 40 customers, and staff based in Auckland and Wellington. The business has been a leading Microsoft Navision partner for over 20 years and more recently has focused on Microsoft’s popular small-to-medium business solution, Microsoft Dynamics 365 Business Central. 

The acquisition of Topaz, says Rebecca Tohill, Fusion5 CEO, will not only broaden Fusion5’s skill base but consolidate and round out its Microsoft offerings.

“Business Central fits nicely into the Fusion5 portfolio of applications. It will offer a choice for those customers who are committed to a wholly Microsoft environment but are not of a size or scale to adopt Dynamics 365 Finance and Operations. We will also be able to introduce our new team to businesses who already use Navision or Business Central and who are keen to experience Fusion5’s highly regarded support and service model,” says Tohill.

While Fusion5 is a multi-vendor partner, Tohill says she doesn’t expect the addition of Business Central to impact customer uptake of Oracle’s NetSuite business suite. “While both solutions have notable success in the same target market,” she says, “each has a distinct proposition and unique differentiators.”

The new Business Central and Navision teams will come under the leadership of Kristy Brown, Director Customer Engagement & Collaboration for Fusion5. “The purchase of Topaz gives us the unique opportunity to welcome on board a team of very highly skilled practitioners and great customers - some of them already shared with Fusion5,” says Brown. “Essentially, bringing Topaz into the fold provides us with a powerful end-to-end Microsoft Dynamics 365 story.”

Hartmut Otting, Managing Director and part-owner of Topaz Solutions, says, “We recognised in Fusion5 the same passion for excellence in service and support, and a commitment to customers and consultants alike. While we help complete Fusion5’s Microsoft portfolio, from our perspective, the Topaz team will gain valuable career opportunities due to the size of Fusion5 and its well-developed, award-winning Microsoft practice. And our customers will gain access to the full scope of business solutions, services, and intelligence that will help them thrive and grow.”

Fusion5 and Topaz have already put the relationship to the test over the last few months, successfully securing new customers across New Zealand and Australia. 

Fusion5 has announced a partnership with Waterman Private Capital to support the business applications company’s growth objectives in New Zealand and Australia. Waterman’s investment will see them acquire a 55% shareholding in Fusion5.

“As a major shareholder in Fusion5, Waterman shares our enthusiasm for transforming our business into a significant provider of new initiatives, rich expertise, consultancy, and game-changing innovation,” says Rebecca Tohill, Fusion5 Chief Executive New Zealand/Australia. 

“Waterman’s investment in Fusion5 strengthens our position in the market, and enables us to grow more quickly, take advantage of high growth opportunities, and provide an even more comprehensive range of solutions and services to our customers.”

To date, Fusion5 has successfully expanded its staff numbers, capabilities and solution portfolio through an ongoing acquisition strategy. The recent addition of Mindfull, a leading business intelligence consultancy, into the fold raised Fusion5’s revenue to $100m, and its headcount to 470 staff across nine offices.   

“With Waterman on board, Fusion5 will continue to grow both organically and through acquisition.  The market is presenting many opportunities across all our vendor partnerships and we are excited to take advantage of these”.

About Fusion5
Fusion5 offers a full range of digital transformation business solutions, applications, consulting services, cloud, and managed services as well as first-class support and training. Their expertise covers all key functional business areas, including Enterprise Resource Planning, HR/Payroll, Customer Relationship & Experience Management, IT Service Management, and Infrastructure. They are also known for vertical-specific solutions developed across several key industries.

Currently, the company has over 900 customers, spanning multiple countries. Fusion5 is recognised as a leading partner for a range of global technologies including Microsoft, NetSuite, Oracle JD Edwards, IBM and Ivanti.

For further information please refer to Fusion5's website: www.fusion5.co.nz

Auckland Clinical Studies (ACS), Christchurch Clinical Studies Trust (CCST) and Waterman Capital have announced the establishment of New Zealand Clinical Research (NZCR) through the merger of the two world-leading early-phase clinical research units. Waterman has acquired a majority stake in NZCR alongside its founding shareholders and management.

Established in 1999 and 2006 respectively, CCST and ACS are leading providers of clinical research services, with a combined capacity of 65 beds. Together the two organisations have conducted studies across a wide range of therapeutic areas including ground-breaking work into viral hepatitis under the leadership of Hepatologist Prof Ed Gane. NZCR will be one of the leading clinical research group’s in Australasia, providing services to a global marketplace as well as playing a key role in the New Zealand medical community.   

Matt Riley and Jacques Venter will join the NZCR Board to represent Waterman’s interests, which will be chaired by independent director Hamish McGregor. The NZCR senior management team will be led by current ACS Managing Director Dr Christian Schwabe, working closely with Dr Chris Wynne as Chief Operations Officer, and Prof Ed Gane as Chief Medical Officer.

The key attractions for Waterman included ACS and CCSTs’ outstanding global reputation, and the potential to further develop the New Zealand clinical research infrastructure with the promise of attracting more overseas pharmaceutical and biotechnology companies to this part of the world. This will result in better treatment options for patients in New Zealand.

Prof Ed Gane, NZCR Chief Medical Officer said, “Today marks a significant milestone for clinical research in New Zealand. Through this strategic merger, we are bringing together two of the most innovative and respected clinical research units to create a stronger research company with expanded capabilities and expertise.”

Board member Matt Riley added, “Together these companies can better serve their international clients through complementary skills, increased scale and flexibility. New Zealand is already an attractive location for all phases of clinical research and the country’s response to the current pandemic has further highlighted the excellent environment for clinical research here. Waterman is looking forward to working with the experienced ACS and CCST teams to further expand their capabilities for the benefit of New Zealand patients”.

For further information please refer to ACS and CCST websites https://www.clinicalstudies.co.nz/; https://www.ccst.co.nz/.

TRG Imaging (TRG) has announced the successful acquisition of Canopy Cancer Care (Canopy), New Zealand’s leading private provider of medical oncology services. Canopy’s existing shareholders are to become shareholders in the combined group following the transaction.

Canopy’s clinicians, nurses and support staff specialise in the care of adult patients requiring medical cancer treatment including chemotherapy, immunotherapy, antibody therapy, hormone therapy and other targeted therapies.  

Following its establishment in Epsom in 2012, Canopy has added three clinics to its network across Auckland (North Shore), Whangarei and a joint venture in Tauranga. Canopy is now the largest provider of private medical oncology treatments in the country with 20 oncologists and haematologists.

TRG was attracted to Canopy due to the experienced team of oncology specialists, high quality of clinical care and opportunity to provide more New Zealanders with access to private cancer treatment. In addition, mutual patients of TRG and Canopy will benefit from single site access at selected locations, patient record management and referral coordination.

For further information on Canopy please go to https://www.canopycancercare.co.nz/

Waterman Capital is pleased to announce it has closed its fourth fund, raising $230 million from a broad base of New Zealand and international investors. The Fund was significantly oversubscribed, reflecting strong interest from existing and new investors.

Fund 4 investors include family offices, eligible individuals, community trusts, iwi and institutional investors. Consistent with Waterman’s previous funds, Fund 4 will provide later stage expansion funding and growth capital to mid-market private New Zealand companies.

Waterman will maintain the same investment thesis it has adopted in deploying its previous three funds, to ‘create superior returns through active involvement in privately owned New Zealand companies’.

Waterman Capital is pleased to announce that it has acquired a majority stake in TRG Imaging (TRG) alongside its founding shareholders, management and several new employee shareholders.

Established in 2004, TRG Imaging is a leading provider of diagnostic imaging services, comprising of 19 clinics across the North Island and the Auckland Breast Centre, New Zealand’s leading provider of breast cancer related services. TRG is the second largest diagnostic imaging provider in New Zealand and is the largest in the North Island.

Matt Riley and Jacques Venter will join the Board to represent Waterman’s interests. The senior management team led by long-time CEO Tony Moffatt remains unchanged.

The key attractions for Waterman included TRG’s strong reputation for clinical excellence and its comprehensive North Island footprint. TRG plays a critical role in New Zealand’s health infrastructure with diagnostic imaging increasingly being used as a preventative tool in the early identification and treatment of health issues.

The health sector benefits from a strong outlook as population growth, particularly in Auckland, an ageing population and demand for increasingly sophisticated diagnostic solutions drive annual increases in the provision of patient services. This is particularly true of highly technical MRI and CT imaging services.

For further information on TRG Imaging please go to www.trgimaging.co.nz

Provincial Education Group (Provincial, the Group) has announced the successful acquisition of the Cubbyhouse Group (Cubbyhouse) of early childhood education centres. Cubbyhouse shares similar educational values to Provincial and is therefore an excellent fit with Provincial’s existing portfolio of centres. Provincial was particularly attracted to Cubbyhouse’s strong educational team, as well as its focus on community relationships and quality centre environments.

Cubbyhouse includes four premium, purpose-built centres in New Plymouth, Palmerston North and Masterton. Cubbyhouse opened its first centre in 2010 and now is an operator of 400 license places.

The acquisition brings the total number of new centres that Provincial has successfully opened or acquired over the last 12 months to 15 and brings the total number of centres in the Group to 55, making it the third largest early childhood education provider in New Zealand.

My Food Bag has announced today that it has appointed Kevin Bowler to the position of Chief Executive Officer. Kevin has an outstanding track record as a leader and an innovator. He was previously CEO of Tourism New Zealand. During his time leading Tourism New Zealand, the international visitor sector grew over 30% to be New Zealand's biggest export earner, worth more than $13b annually and attracting over 3.6m overseas visitors each year. Most recently he served as Chief Executive of Frucor Suntory.

“We’re thrilled to welcome Kevin to the company. He has outstanding leadership skills and a visionary style which will play an important role in propelling My Food Bag to new heights and reach more customers with our healthy and delicious meal choices,” says Cecilia Robinson.

Kevin’s broad and senior business leadership experience covers a diverse range of industries including consumer packaged goods, telecommunications, and media brands, in both New Zealand and internationally. He is excited to join a growth company which, despite being a household name, is barely five years old.

“My Food Bag is widely recognised as one of the most innovative companies in the country, we are also a company that has become renowned for our focus on our people and our customer first approach,” Bowler says. “I love that the business is built in New Zealand and for New Zealand.”

Kevin’s history of driving and achieving company outcomes is a key factor in his appointment. As Chief Executive of Tourism New Zealand, Kevin continued to evolve the successful '100% Pure New Zealand' campaign repurposing it for a digital media world using it as a platform to position New Zealand as an aspirational destination. In his time at Frucor Suntory, he has championed the need for a wider portfolio of ‘better for you’ drinks including the recent launch of Amplify Kombucha and an extended range of packaged water propositions.

Kevin is a father to two daughters and is based in Auckland.

Thursday, 29 March 2018
Press Release: Auckland Business Chamber

My Food Bag won the Supreme Business Excellence Award at last night’s Westpac Auckland Business Awards Best of the Best for 2017.    

Following on from their two regional awards last year for Customer Service Delivery and Business Excellence, the food delivery business’s founder, Cecilia Robinson, says consistency comes with the pursuit of excellence every single week. 

“We aim to get better every week and we never rest on our laurels. So as a team we are always challenging ourselves, we always think about how we can do more and get better. That’s just part of our DNA in who we are.”

Westpac Regional Commercial Manager Jeff Driscoll, congratulated My Food Bay and acknowledged their very deliberate and focused approach to running their business. 

“As businesses, My Food Bag and our other winners tonight each demonstrate why they are class acts and collectively will go a long way to helping grow the Auckland and New Zealand economy.”

Waterman Capital is pleased to announce that it has acquired a majority stake in PBT Group (PBT) alongside founder Peter Baker. PBT is a national freight, courier and logistics operator founded in 1972 by Peter Baker. The business has nationwide depot network of 20 branches and a workforce of 800 people, including 400 owner drivers. The business moves more than 13 million individual freight items each year.

Key attractions for Waterman include PBT’s very strong brand, its comprehensive national network, its integrated service offering and its loyal and committed work force. Waterman has previous experience in the wider freight and logistics sector through successful investments in the international forwarding space.

Mr Baker will remain involved with the business as a shareholder and non-executive director. Dave Lovegrove has been appointed as the new CEO of PBT. Mr Lovegrove was previously CEO of Waterman investee Express Logistics, and more recently has worked for Toll in New Zealand and South East Asia. Matt Riley and Jacques Venter will represent Waterman’s interests on the board and will work collaboratively with management and other stakeholders to assist the company in meeting its long-term growth aspirations.

The sector has a robust outlook with New Zealand’s freight task expected to grow by 48% in tonne-kilometres by 2048. PBT is well placed to build upon its comprehensive national network and integrated service offering as it begins a new chapter in its long and successful history. For further information on PBT please go to www.pbt.co.nz

Waterman Capital (“Waterman”) today announced that it has sold its 50% shareholding in HealthLink Group Limited (“HealthLink”) to global healthcare technology specialist, Clanwilliam. HealthLink is Australasia’s leading health-system integrator with 13,500 healthcare organisations and professionals exchanging over 100 million electronic messages each year through HealthLink.

Since Waterman’s investment in November 2013, the company has materially increased both revenue and earnings through growth in new customers, increased usage across the unique HealthLink network and the rollout of new services. Particular initiatives during our ownership included:

• Development and implementation of a strategic plan to grow the Australian market.
• Introduction of agile development methodologies and product-led teams;
• Improving operating leverage within the business via greater focus;
• Key contract wins include; Ministry of Social Development (NZ), Roads & Marine Services (AU), Australian Digital Health Agency (AU) and Australian Hearing (AU).

Graeme Stretch, CEO of HealthLink says:

“Clanwilliam Group’s investment is clear recognition of the importance of the health-system integrator’s role in integrating information flows within the modern health system. We have a common belief that information technology can be of great benefit to the delivery of healthcare and can best be achieved by connecting information systems, allowing healthcare providers to automate and streamline their existing processes.”

“We are very grateful to Waterman Capital for partnering with us to grow the business over the past five years, their support has been invaluable.”

Clanwilliam is wholly owned by Eli Global Group (“Eli”). Eli is based in the US and employs 5,000 employees worldwide across the following industries: information and media, education and certification, healthcare technology, financial services and insurance.

In August 2017, Waterman Capital announced that it had acquired a majority stake in Provincial Childcare Education Group (Provincial) alongside founders Andrew and Katie Phillipps, and experienced Australian childcare investor Chris Giufre. Andrew and Katie will continue to manage Provincial on a day to day basis and will be joined on the board by Chris Giufre, Matt Riley and Jacques Venter.

Provincial operates 40 childcare centres clustered across New Zealand and is the fourth largest operator of childcare centres in New Zealand, with a total of over 2,700 licensed places. The core values of Provincial are to put parents and children first. It aims to promote passion, professionalism, and family values across all of Provincial’s centres to bring out the best in children and develop their capabilities in readiness for primary school.

There are approximately 2,500 childcare centres in New Zealand and the large majority are independently owned and operated. Waterman has invested to support three highly capable industry experts in expanding Provincial’s national footprint as it continues to acquire and improve further childcare centres.

For further information on Provincial Education Group please go to https://www.provincialeducationgroup.co.nz/

NZ Herald Article, by Colin Taylor

Home food delivery provider My Food Bag has relocated to a new building in Parnell to cater for rapid growth that has seen the company more than treble the size of its Auckland premises.

The company has consolidated its office and development kitchen operations from two separate locations at 280 and 283-285 Parnell Rd. which total about 550sq m; and has moved into two freshly fitted-out floors totalling around 1627sq m at 56 Parnell Rd.

A nine-year year lease, negotiated by Ben Wallace of Bayleys Auckland, encompasses 533sq m of ground floor kitchen, showroom and office space; and 1094sqm of third floor offices and 32 basement car parks.

"My Food Bag had some very specific and unique requirements which meant that standard office floors weren't necessarily going to suit their needs," says Wallace. "Fortunately, we were able to identify a building close to their existing premises which aligned with those requirements as well as providing flexibility for future growth.

"We also had a forward-thinking landlord willing to countenance a complete retrofit to accommodate a high-profile tenant with impressive aspirations. We then partnered My Food Bag with interior designers and project managers Platform Consulting Ltd - who we knew could deliver a funky, individualised fit-out that reflected My Food Bag's corporate culture.

"Their two levels of space underwent a complete refurbishment to provide a stunning modern character working environment complete with polished concrete floors, exposed ceiling services, new lighting and plenty of functionality."

My Food Bag founder and co-CEO Cecilia Robinson says the new premises will enable the company to become even more innovative. A standout feature is the development kitchen which takes up the majority of the ground floor space.

"A big part of our success lies in the work our chefs put in to the development and testing of ingredients and recipes for all our offerings and this is reflected in the space that has been allocated to this vital part of the business. The new development kitchen gives our team the ability to innovate in accordance with Nadia Lim's 'nude food' philosophy to deliver exciting new offerings to our customers."

The number of cooking stations has been increased from three in the old premises to 10, and these are fully decked out with the latest state-of-the-art Fisher & Paykel appliances plus a "living wall" including herbs that are used in recipes.

In another innovation, a two-station photography kitchen has been installed where each dish that makes its way through a stringent evaluation process undergoes a photography shoot for use on recipe cards and other marketing collateral. Completing the development kitchen is a large pantry and chiller where ingredients are held.

The "back end" of the business is located on Level 3 which has also been completely reconfigured to accommodate My Food Bag's operations, procurement, finance, marketing, digital and customer love teams.

This is mostly open plan space but with break out rooms that carry the "middle" name of the founders of the business, Cecilia and James Robinson, Theresa Gattung and celebrity chef Nadia Lim and her husband Carlos Bagrie. Each staff member adopts a food ingredient as their My Food Bag middle name.

Kevin Roberts joined the team as a shareholder and chair in 2015 and the board room on Level 3 is called Rhubarb after the name he chose.

The third level also has a substantial central raised platform area which serves as a staff kitchen and gathering place and has expansive views over Fraser Park towards the Sky Tower and CBD.

Wallace says the level's floor-to-ceiling glazing means it benefits from plenty of natural light to help create a lively and bright working environment.

My Food Bag began operations in 2013, offering a service where customers ordered online and received food bags containing recipes for a week's main dinner meals. In mid-2016, it expanded its offering with the launch of the Bargain Box brand and recently launched Fresh Start with Nadia, a new product range designed specifically for people wanting to manage their weight. The company now delivers more than one million meals to New Zealanders each month.

In October 2016, My Food Bag announced it had secured investment from Waterman Capital to support its ambition to list on the New Zealand Stock Exchange within the next three years to raise further capital.

- NZ Herald

Market leading home food delivery provider, My Food Bag (MFB), today announced that it had successfully secured investment from Waterman Capital. This partnership will support the company in achieving its growth ambitions, with aspirations to seek public capital within the next three years to further fund its development.

MFB was established to resolve the dilemma, “what are we having for dinner tonight?”, and now delivers more than one million meals to New Zealanders each month. In an environment where people are increasingly time-poor and health conscious, MFB sees further opportunities to grow whilst making a positive change in the lives of New Zealanders. Waterman describes the business as a tremendous New Zealand success story.

Founder & co-CEO Cecilia Robinson says the directors are very pleased to have Waterman Capital as part of the team for the next evolution of My Food Bag’s growth and development.

For the My Food Bag team it’s very much business as usual, with celebrity chef and co-founder Nadia Lim’s role remaining unchanged as the company’s brand ambassador and food expert. Cecilia and James Robinson will continue in their roles as co-CEOs to lead the company through this next phase of growth.   

Waterman Capital takes three seats on the board filled by Chris Marshall, Lance Jenkins and Phil Maud. Kevin Roberts continues to chair the company and Theresa Gattung will also remain as a director.  Robinson says “when we announced our intention to capital raise we were flooded by customers wanting to invest in the company.  As we have now set our sights on future growth and a possible IPO, we are thrilled to give kiwis an opportunity to become shareholders”.

Local investor, Waterman Capital was founded in 2004 to provide long-term capital and complementary skills to New Zealand businesses. Waterman is considered the ideal partner to provide the expertise to accelerate My Food Bag’s growth as the company prepares for the public markets, Robinson adds. 

Waterman Capital spokesperson Chris Marshall says that, as a New Zealand investment group, Waterman’s resources will be applied to extending the My Food Bag success story. “Waterman has a long track record of investing in and adding value to private businesses in New Zealand. These companies are the life blood of the domestic economy. We have been very impressed with the MFB team and what they have created. What they can do going forward is very exciting and we are looking forward to sharing in that journey over the next five years and beyond.”

In May 2016, the company announced it was seeking expressions of interest from equity investors as it reviewed its capital structure. With strong local and international interest, Robinson says the shareholders are pleased that in Waterman, full company ownership remains in Kiwi hands.

“My Food Bag has rapidly grown to become a household name. This partnership reflects the next step in the maturity of the business and it is our intention that our foodies are going to be able to buy a stake in the business in the future” Robinson notes.

Waterman is pleased to announce that it has successfully completed its capital raising for Fund 3, closing the fund at its hard cap of $200,000,000.

The Fund was significantly oversubscribed having received strong support from both existing and new investors.  The investors in Fund 3 include family offices, eligible individuals, community trusts, iwi and institutional investors.

Our investment thesis is to ‘create superior returns through active involvement in privately owned New Zealand companies’, and the investment focus for Fund 3 is consistent with prior funds. This investment philosophy is as relevant today as it was when Waterman was established in 2004.

Waterman Capital is pleased to announce the launch of its third private equity fund, Waterman Fund 3 LP. Waterman was established in 2004 and has been successfully investing in privately held New Zealand companies for more than a decade.

Like its predecessors, Fund 3 will continue to provide capital and skills to assist private, New Zealand based businesses achieve their growth aspirations. These companies form the heart of the New Zealand economy and have significant growth potential but are often constrained by a lack of capital and resources.

Fund 3 is targeting commitments of $150 million and has been strongly supported by returning investors. It will focus on expansion and replacement capital, and management buy-out transactions. In all instances Waterman seeks to partner with management and other shareholders for mutual benefit.

In September 2015 Waterman announced the divestment of its interests in leading Manuka honey producer and exporter Manuka Health New Zealand Limited. The same month it announced the sale of its interests in Academic Colleges Group New Zealand’s largest private education provider. Both businesses had experienced very significant growth over the period of Waterman’s investment. Waterman continues to work closely with the management and other shareholders of its remaining portfolio investments.

The 2015 New Zealand Private Equity and Venture Capital Association (NZVCA) Deal of the Year Award has gone to Waterman Capital for its investment in Manuka Health.

The NZVCA Deal of the Year Award recognises outstanding performance in the private equity industry and was announced at the NZVCA 2015 annual conference in Queenstown today (22 October).

NZVCA Executive Director Colin McKinnon says: `The Waterman Capital investment in Manuka Health is an example of innovation, growth, and excellent returns on investment that benefit investors. Through the period of Waterman’s ownership revenue grew from $17m in 2012 to approximately $70m in the current year.’

Entries were judged on return to investors and the company's financial performance. The company's contribution to the economy, employment, innovation, consistency and industry competitiveness was also taken into account.

Mr McKinnon adds: ‘the winner of our 2015 award is an example of the purpose and aim of private equity: to partner with companies to improve growth and performance, to share expertise and capital. This ultimately delivers improved productivity, creates jobs and contributes to the national economy.’

Manuka Health is the second largest producer and exporter of Manuka honey related products in New Zealand and has demonstrated extraordinary year on year growth since its inception in 2006.

Waterman invested in Manuka Health in 2012 providing expansion capital to fund a number of growth initiatives. During this period the company:

• constructed a $10m, state of the art, processing facility in Te Awamutu which tripled production capabilities;

• quadrupled staff numbers including a number of senior appointments;

• made significant advancements to secure further supply of the key raw ingredients, manuka and propolis;

• invested significantly in research and development to support products with scientific health claims and protect relevant intellectual property; and,

• played a central role in introducing industry regulation which will benefit Manuka Health and the wider honey sector.

Established in 2004, Waterman Capital is one of New Zealand’s most experienced private equity players. It manages a series of funds that channel capital and skills to private companies like Manuka Health. Other investments include New Zealand’s largest education business Academic Colleges Group, and Healthcare Holdings (Mercy Ascot), operator of the largest private hospitals in Auckland.

Waterman Capital (“Waterman”) today announced that it had, together with other shareholders, entered into a contract to procure the sale of 100% of the shares in Academic Colleges Group Limited (“ACG”). ACG is New Zealand’s leading and largest private education provider and has ambitious growth plans for the future.

Founded in 1995 by Sir John Graham (ex-Auckland Grammar School headmaster) and Dawn Jones (ex-Diocesan School principal) ACG is best known for its private schools in Auckland, which provide students with a world-class academic education in an environment where achievement and excellence is celebrated. The Group also operates international schools in Vietnam and Indonesia, while in New Zealand it provides tertiary & careers training, early childhood education, English language and university foundation courses.

ACG provides education and training to over 10,000 students per year, enabling each of those individuals to pursue their chosen pathway to further education or employment.

Waterman invested in ACG in January 2013. During the period of our ownership, ACG more than doubled revenue and earnings through a combination of organic and acquisition growth. Particular growth initiatives during the period of our investment included:

• The opening of a new school in Tauranga, ACG Tauranga;

• Acquisition of the ACG Strathallan College operating entity;

• The merger of ACG’s two existing schools in Vietnam creating a high level of revenue and cost synergies;

• A significant push into the vocational space, with the establishment of the ACG Tertiary and Careers division, comprised of four separate acquisitions of leading tertiary businesses.

The transaction is subject to OIO approval and various other market standard conditions.

We are very pleased with the outcome for our investors and believe the company is well positioned as it moves to the next stage of its lifecycle.

Waterman Capital (“Waterman”) today announced that it had, together with other shareholders, sold 100% of the shares in Manuka Health New Zealand Limited (“Manuka Health”) for an undisclosed sum. Manuka Health is the second largest producer and exporter of Manuka honey related products in New Zealand and has demonstrated extraordinary year on year growth since its inception in 2006.

Waterman Director, and Director of Manuka Health, Chris Marshall commented that: “We are very pleased with the outcome of our Manuka Health investment. The company has grown at an extraordinary pace and delivered an outstanding return to our investors. We are similarly pleased that our skills and capital have been of assistance in achieving such a satisfying outcome.”

Waterman invested in Manuka Health in 2012 providing expansion capital to fund a number of growth initiatives. During this period the company:

• Constructed a $10m, state of the art, processing facility in Te Awamutu which tripled production capabilities;

• Quadrupled staff numbers including a number of senior appointments;

• Made significant advancements to secure further supply of the key raw ingredients, manuka and propolis;

• Invested significantly in research and development to support products with scientific health claims and protect relevant intellectual property;

• Played a central role in introducing industry regulation which will benefit Manuka Health and the wider honey sector. 

Through the period of Waterman’s ownership revenue grew from $17m in 2012 to approximately $70m in the current year.

We are very pleased with the outcome for our investors and believe the company has been well positioned as is moves to the next stage of its lifecycle.

Lance Jenkins: Savings scheme’s failure to invest in private equity means it’s falling short of Cullen’s vision to oil business sector.

Michael Cullen, the architect of KiwiSaver, wrote at the time of its launch in 2007 "that KiwiSaver would help us own more of our New Zealand businesses and that it would produce deeper capital markets to provide the oil for a well-functioning business sector".

I applauded that statement at the time as I saw KiwiSaver creating a pool of savings that would lead to investment in great New Zealand companies, both public and private.

Over the past eight years we have seen part of those savings flow into listed New Zealand public companies, but little (if any) of those KiwiSaver funds have provided "oil" for New Zealand's private business sector.

We are unique in New Zealand in that the ratio of private to public companies is far higher than in most other developed nations. We are, in essence, the land of private business. A lack of capital flowing into New Zealand private companies therefore misses a large and important part of the overall economy.

These private companies, however, have the same need for investment and capital as public companies. To enable our private companies to grow, we need to provide them with the capital to help execute on their growth plans.

A number of New Zealand institutional investors have recognised this private market opportunity and have channelled capital to private companies by investing through New Zealand private equity fund managers or, on occasion, by investing directly.

By way of example, Waterman Capital has received investment from the New Zealand Superannuation Fund and Accident Compensation Corporation amongst others, with a mandate to provide capital and skills to help grow New Zealand's private businesses.

Recently, we have also seen a number of local community trusts, iwi groups and others allocate part of their investment portfolios to New Zealand private equity.

It's an attractive investment class for those investors with longer term investment horizons. Research shows that historical returns to private equity are materially higher than the returns of the equity market.

For KiwiSaver, as a long-term retirement savings vehicle, the fact you need to be patient for strong returns seems like a natural fit.

KiwiSaver providers need to consider giving savers access to an asset class that historically has delivered strong returns over time. If the asset class is attractive enough for our crown investment entities, for community trusts and iwi - why aren't KiwiSaver providers also embracing New Zealand private markets?

John Berry of Pathfinder Asset Management recently wrote an article on KiwiSaver and private equity and while he supported the investment class, he pointed out three key hurdles that a KiwiSaver provider may highlight which I think are worth addressing:

A lack of asset liquidity. It's true that private equity is a long-term asset class, but so is KiwiSaver. For KiwiSavers who have 10 or 20 years of contributions ahead of them, given the historical returns, this is an asset class that should be highly attractive to them.

No daily asset valuation makes it difficult for KiwiSaver providers to mark these assets to market. Private equity funds tend to revalue their assets every three to six months, so yes, it's not daily, but again let's look at what KiwiSaver is. It's a long-term investment class, and therefore should we really be concerned that part of the investment portfolio is not being priced daily? It's what a KiwiSaver has in his or her fund on turning 65 that matters, not daily asset valuations when they are 20 years away from retiring.

Fee structure. Fees are sometimes highlighted as an issue. Firstly, as an investor in any asset class it's net returns that matter (that is, after all fees are paid). The returns that are reported are after fee returns and it's these returns that have been impressive, in some cases almost twice those of equity markets.

Secondly, fees for private equity firms are in the main performance based. Unless investors are making a return, private equity fund managers aren't receiving a large part of those fees. That alignment of interest between investors and private equity fund managers is a key attraction to investment.

Finally, managing a private investment requires a far greater hands-on role than managing other investment classes. Investing in private businesses requires an active management role, not merely a passive one. It is this contribution of skills and help to private businesses that helps drives the superior returns to investors.

In my opinion these hurdles for KiwiSaver providers can all be positively addressed.

KiwiSaver has been a wonderful development for New Zealand and for its capital markets. As this pool of savings flows through to New Zealand business we all benefit from the jobs created and from the economic growth that flows from this.

But as KiwiSavers we are currently investing in only the publicly listed part of the economy. Private businesses, as an important and large part of our economy, also need some of the "oil" that Cullen envisioned at the launch of KiwiSaver.

Private equity, or private company investing, can provide outstanding returns for investors who can be patient. For KiwiSavers who are committed to investing to fund their retirement, private equity is an important option that should be available to them. Eight years on, it's time for KiwiSaver providers to consider alternatives.

Partners Life has been named the Insurance Provider of the Year at the PAA Excellence Awards for the second time in the company’s four-year history.

Partners Life managing director Naomi Ballantyne says to receive the award twice in three years is profoundly gratifying for her company and its partners.

PAA board member Geoff Peterson says the nod to Partners Life is a true reflection of advisers’ view of the company’s service to the industry. “It’s voted on by our members, who are advisers in the New Zealand market who are selecting the provider they believe is offering the best solutions for their customers. The insurers who have received this award historically are those who appreciate that the best advisers are focused on what each customer needs rather than loyalty to a particular company.”

This latest recognition of Partners Life follows a 5-star rating for the company in the annual Beaton Survey of Independent Advisers last year. The 2014 survey marked the fourth year in a row the company received a 5-star rating (the only such rating that year), and Partners Life scored an overall satisfaction rating of
 85%, up from its 2013 rating of 82% and compared with an industry average of 71%.

Lance Jenkins: Private equity investing offers rich return

Capital and support important given the large proportion of unlisted firms in NZ, writes Lance Jenkins.

As a private equity (private company) investor there are three questions I regularly get asked - what is private equity? Do we need private equity in New Zealand? And for an investor, how does it actually work?

What is it?

Private equity simply means the investment of equity capital in companies which are not listed on a public stock exchange.

Private equity investors, however, provide more than just capital, they also support a company's management team in developing and executing growth strategies over an extended period of time. We are, in essence, long-term investors and partners in private businesses.

Before any investment is made, private equity investors spend a large amount of time upfront working with management and owners to understand what they do, the industry dynamics and how value can be created for all partners.

Every investment made is based on a belief in the management team and a clear understanding of how our complementary skills can help them deliver on and execute their growth plans.

Research published last year by GE identified about 34,000 "mid-market" private businesses in New Zealand. Over two-thirds of these businesses saw growth as a key area of focus, but they also identified two hurdles to achieving and implementing those growth plans.

Succession planning, or having the capital to buy out retiring owners, before taking the business to its next stage of growth, was seen as a hurdle.

I would add to this hurdle that access to equity growth capital in general can be an issue for private companies. But regardless of whether a business is dealing with a succession issue, or looking for new equity to fund a growth opportunity, equity capital matters for private businesses. Private company investors such as Waterman Capital fill this need in the marketplace.

Another issue highlighted by a number of those companies was a concern that they may not have the internal resource or capability to execute on their growth plans.

Private equity investors offer "hands on help" to a company in complementary areas such as acquisitions and strategic planning which are clearly important to a growing business.

A key focus for us at Waterman is to work closely with the companies we are invested in. Unlike a public company investor, we can't just sell our shares in an open market.

We are partnering with management and owners to achieve the common goals of growth and value creation. Through equity investment, we share an alignment of interests that goes to the heart of success in private equity investing.

As partners, our job is to contribute to what a business is doing, in a supportive and value adding way. In addition to providing capital, we become another resource to help grow and develop the business.

Do we need private equity in NZ?

There are two perspectives to this question. Firstly the private company's perspective looking for capital and value add, and secondly from the perspective of the investor, who is looking at private equity as an investment opportunity.

In New Zealand, private equity has an important role to play in providing both equity capital and hands on help. The important point is that here in New Zealand we are different, because private companies make up a larger proportion of our economic and business landscape than in most other developed countries.

While the NZX has done a laudable job attracting quality companies to list, there is still a large under- representation of New Zealand's underlying economy in the public markets. It is for that reason that private companies matter more here in New Zealand than elsewhere and why private equity has a large role to play.

We are fortunate that our two largest institutions, the New Zealand Superannuation Fund and the Accident Compensation Corporation, have recognised both the need for capital in the private company space and the higher returns available to investors.

They have invested in NZ private equity and this funding allows firms such as Waterman to provide growth and succession capital to our private companies.

Having local private equity funds also gives New Zealanders the ability to invest in an asset class that is often difficult to access. For investors with longer time frames, it can be a rewarding experience.

The Australian/New Zealand returns data from industry benchmarking specialists Cambridge recently highlighted that over a 10- year period, private equity funds gave investors (on average) a return of 12.3 per cent per year, versus the NZX and ASX equivalents at 7.2 per cent and 6.6 per cent respectively. Interestingly, if you backed a private equity manager that ranked in the top half of its peers, then the return would have been over 26 per cent per year, or almost four times the listed market equivalent.

So how does it work for investors?

One of the unique aspects of investing in private equity funds is the "commitment" nature of the investment. Unlike buying shares, where you invest $10,000 in a company and pay the $10,000 at the time of purchase, when you invest in a private equity fund you make a commitment to that fund.

That commitment is called down (a "call" is a request for payment) over time by the manager as required, primarily when it finds a business to invest into.

By way of example, if you made a $10,000 commitment and the fund invested that money evenly over the next five years, you would be asked to put in about $2000 a year to fund that commitment.

As the 10-year Cambridge data highlighted, with private equity returns at almost twice that of publicly listed equities, it can be a very rewarding experience for investors.

So in summary, to answer our three questions.

Private equity exists to fulfil a need for both the equity capital required and the hands-on help needed in executing the growth plans of private companies.

This need is particularly relevant in a New Zealand context given the importance and dominance of private companies.

And finally, for investors with longer time frames, the returns can well be worth the wait.

Manuka Health has been recognised as a finalist in the 2015 New Zealand International Business Awards (NZIBA) in the $10 - $50 million General Award Category. The award nomination reflects the growth experienced by Manuka Health over the past eight years and is also an acknowledgement of recent investment in a multi-million dollar plant in Te Awamutu. 

Opened officially in November 2014, the Manuka Health facility is a high tech, internationally accredited laboratory, honey processing factory and global distribution centre which enables the Company to produce award-winning innovative natural healthcare products.

“We are honoured to have been recognised for our success in international business,” says Kerry Paul, CEO Manuka Health. “This comes on top of an exciting year with the opening of our world-class facility and a prestigious Gold Innovation Award for our ManukaClear™ Intensive BB Gel in the USA.”

Waterman is pleased to announce the sale of the Guthrie Bowron business. Following a number of approaches to acquire the business a transaction has been completed with private interests, associated with key management of the company. The business has been owned by Waterman for nine years and has delivered an excellent return to investors.

By way of background, Waterman (Fund 1) acquired 100% of the Guthrie Bowron business in May 2005. Due to its proud history the Guthrie Bowron brand had high awareness and the business held a meaningful market position in its key categories of paint and wallpaper.

The investment thesis supporting the acquisition was to leverage the platform that already existed and extend the product offering into other home decorating categories. A key attraction for us was the high conversion of earnings to cash flow which allowed the company to distribute regular dividends and underpinned the return on investment.

Following acquisition, Waterman repositioned the business as a home decorating specialist. This involved a complete rebranding and new marketing strategy. That was followed by the introduction of curtains to the group and later flooring products. Guthrie Bowron is now one of the top three made to measure curtain and blind retailers in New Zealand and flooring will represent approximately 20% of group sales this financial year.

Since our investment in 2005 the business has grown well. Earnings have doubled and the company has delivered regular dividends in line with our investment thesis. It is worth noting that this period includes the Global Financial Crisis which had a significant adverse impact on the home improvement sector.

We believe the business is now well positioned for another owner to take it to the next stage.

On 1^st October Academic Colleges Group (ACG) announced its acquisition of New Zealand Management Academies Limited (NZMA).

Founded in 1985, NZMA is a large, well-established, Category 1 private tertiary education provider. It has campuses at Sylvia Park and Otahuhu in Auckland, a campus in Hamilton and serves around 3,000 domestic and international students. NZMA provides programmes from Levels 2 to 7 in hospitality, cookery, business studies, contact centre operations, retail and construction.

CEO of ACG Ian King said “I am delighted that ACG will provide more options within the tertiary and careers sector and do more to train young people for further study or direct transition into the work force. ACG has a close interest in business, cookery and hospitality, IT, art and design”.

“NZMA is a leader in its sector of the market, and is helping to lift educational outcomes for its communities, something ACG is very focused on,” said Ian. “We are pleased to have NZMA join ACG along ACG Yoobee School of Design and New Zealand Career College (NZCC). Our vision for a comprehensive tertiary and careers division offering a wide range of qualifications and pathways to the workforce is now a reality.”

ACG’s Divisional Chief Executive of the ACG Tertiary and Careers Division, Feroz Ali, said NZMA represented a significant addition to the Group’s tertiary and careers capability.

On 1^st August ACG announced its acquisition of NZ Career College (NZCC).

NZCC has been providing a range of certificate and diploma courses in Early Childhood, Health, Business, English and Electronic Trades since 2002.

NZCC operates five campuses across Auckland, Wellington and Christchurch and employs around 70 staff. It attracts 700 domestic and international students a year.

The founder of NZCC Mr Feroz Ali will take up a senior role with ACG as Divisional Chief Executive of the ACG Tertiary and Careers Division.

Partners Life, New Zealand’s fastest growing life insurer, has achieved two major milestones recently with a significantly oversubscribed capital raising and the accumulation of $100m in in-force annual premiums.

“It is just over three years since we opened for business and, in a market dominated by well-resourced and long-established foreign-owned life companies, we have created a very substantial and competitive New Zealand company,” says Partners Life Managing Director Naomi Ballantyne.

“The record of our management team in the industry and the quality of our products and service has seen us win and sustain strong support from independent advisers.  Add to that the high level of under-insurance in the New Zealand market and it is clear that there are plenty of opportunities for sustained growth.” 

The capital raising attracted such strong interest that the amount raised of $31.6m, was well in excess of the target minimum of $20m. Existing investors (including Waterman) all supported the raising.

“Investors have been attracted to the combination of our experienced leadership team, our proven track record of sustained growth, and the market potential available to us.”

The funds raised further strengthen Partners Life’s capital position.  They will be used to support continued business growth through the provision of exceptional consumer product and service offerings.

On 28^th February ACG announced its acquisition of the Yoobee School of Design from listed company Renaissance Corporation (RNS).

The Yoobee School of Design is New Zealand's largest specialist private tertiary provider of creative digital technology courses and related resources. Established in 1997, it has campuses in Auckland, Wellington and Christchurch which offer certificate and diploma courses, short courses for the community, primary and secondary school students and teachers.

ACG sees significant opportunity available through extension into the tertiary sector. The digital space is of particular interest as it resonates strongly with both domestic and international students.  ACG has a strong history in arts and design so the progression to digital creativity is logical and highly complementary.

WATERMAN ANNOUNCES INVESTMENT IN NEW ZEALAND INFORMATION TECHNOLOGY COMPANY, HEALTHLINK

Waterman Capital is pleased to announce its investment in leading New Zealand health information technology company, HealthLink.

Waterman Fund 2 LP will hold a 50% stake in HealthLink alongside the executive management team. Chris Marshall and Jacques Venter will join the board as Waterman’s representatives.

About HealthLink

HealthLink is an information technology company whose products enable health care practitioners, medical organisations and other health sector stakeholders (e.g. ACC and the Ministry of Health) to communicate electronically and securely share medical information with each other. HealthLink is the largest player in the New Zealand and Australian markets.

HealthLink’s customer base includes over 30,000 medical professionals operating out of 10,000 sites and it is estimated that HealthLink’s system exchanges 60 million pieces of clinical information each year, removing approximately 50 million items of paper from the New Zealand health system.

The Business is headquartered in Newmarket, Auckland and also has an office in New South Wales, Australia. A pilot study is being conducted in British Columbia, Canada. 

For further information about HealthLink please go to www.HealthLink.net.

Investment Attractions

• Attractive industry: global demand for healthcare in developed countries is increasing at rates significantly faster than GDP growth and health systems are under pressure to reduce costs and become more efficient.
• Strong market position: HealthLink is the largest player in the New Zealand and Australian markets and barriers to entry are high. HealthLink’s wide market footprint provides a launching pad for new products.
• Highly trusted brand and value added service offering: HealthLink has a highly trusted brand built up over twenty years and its products provide compelling end user advantages in that they:
• Are designed to reduce the overall cost of healthcare delivery
• Ensure high quality levels of patient information are submitted, resulting in better patient outcomes
• Ensure integrity of sensitive patient medical data
• Growth opportunities: HealthLink has recently introduced five new online products providing a platform for future growth.
• Experienced management team: In Tom Bowden, Graeme Stretch and Dr. Geoffrey Sayer, a highly experienced management team is already in place to lead HealthLink through its next phase of growth.

Commentary from HealthLink and Waterman Capital

Tom Bowden (CEO) of HealthLink says “We welcome Waterman Capital as a new shareholder of HealthLink and believe that they are an ideal partner to support us through our next phase of growth. Waterman stood out from other investors because of its strong team and its ability to provide value to our domestic and international growth strategies”. 

Chris Marshall (Executive Director) from Waterman comments “New Zealand is a leading international player in the delivery of electronic health messaging and associated online services. HealthLink has been instrumental in driving this success. We are delighted to be partnering with this New Zealand success story and look forward to working closely with Tom Bowden and his team to help HealthLink achieve its well defined strategic goals.”

WATERMAN ANNOUNCES INVESTMENT IN NEW ZEALAND LIFE INSURER, PARTNERS LIFE

Waterman Capital is pleased to announce its investment in one of New Zealand's fastest growing life insurance providers, Partners Life (Partners). From establishment almost 3 years ago, Partners has become a substantial business competing and growing strongly in the New Zealand market. As an investor in growth businesses, we are excited about the opportunity of partnering with a strong leadership team, focused on becoming a leading New Zealand life insurer.

Waterman will initially hold a 5% stake. Lance Jenkins, Executive Director at Waterman, will join the board.

About Partners life

Partners Life was founded in 2010 by Naomi Ballantyne (CEO), together with Chris and Richard Coon. Chris and Richard previously founded Sovereign Insurance. Naomi was a founding employee of Sovereign and was the founder/CEO of One Path Insurance (now owned by ANZ). The leadership team has successfully worked together for many years. The Board is chaired by ex Kiwibank CEO, Sam Knowles.

Partners Life offers life insurance (life and income protection related) products to New Zealanders. The company has grown very quickly over the last 3 years to become a substantial competitor in the NZ marketplace. Partners Life distributes its life products through a network of over 1450 independent financial advisors. Its key products include

• Life;
• Trauma;
• Total Permanent Disability;
• Key Person (Disability Income); and
• Health Insurance.

For further information about Partners Life please go to (www.partnerslife.co.nz).

Background

The background to the Partners Life investment dates back to November 2012 when Waterman identified the company as a possible opportunity and approached the company directly.

Waterman has spent the past nine months reviewing the industry and the last three months specifically engaged with the company. Our conclusion was that this is a highly successful company, with an innovative product set, that was making a real impact in the marketplace.

Waterman concluded its investment in Partners Life on 22nd August, 2013.

Investment Attractions

• High growth company - since inception, Partners has been one of the fastest growing life insurance business in NZ.
• Management - we are investing alongside a team that has a very successful track record at Sovereign and One Path, and one that has created a substantial business in less than 3 years.
• Innovative company - the Group's leadership team has a strong history of producing innovative products for the industry.

• Growing distribution force - Partners currently has a network of over 1,450 independent advisors' nationwide and expects to grow this to over 1,600 in the coming financial year.

• Attractive industry - the industry itself has attractive growth having achieved over 9% premium growth pa over the last 10 years.

• Future investment opportunity - given the capital intensive nature of growing life insurance businesses, Waterman will have the option to participate in future capital raising rounds.

• Global partners- since start up, the Group has attracted extensive support, both operationally and financially, from the fifth largest global reinsurer; SCOR. Partners has more recently attracted support from Berkshire Hathaway and Partner Re. These partnerships validate a very successful story.

Commentary from Partners and Waterman Capital

Naomi Ballantyne (CEO) of Partners Life says "We welcome Waterman Capital to the Partners Life shareholder group and we are pleased that Lance will be joining our Board of Directors further enhancing what we consider to be a world-class governance team. This institutional investment by Waterman reflects the significant early success achieved by the business and our expectations of future success".

Lance Jenkins (Executive Director) from Waterman comments "this is a tremendous New Zealand growth story and one that we are privileged and excited to be part of. At Waterman, we are all looking forward to working with Naomi and her team to help Partners achieve its strategic goals".

Lance Jenkins: Opportunities beyond the markets

Consistent returns of 22 per cent show investing in private companies worth looking at, says Lance Jenkins.

Deservedly the NZ equity market has been getting a lot of attention. Photo / NZ Herald

With recent research highlighting that there are approximately 5000 companies in New Zealand with revenues of $10 million, that suggests a very large pool of companies for funds like ours to partner and provide growth capital to.

The listed markets have been a great place to be invested and depending on who you listen to, the current market provides either a great opportunity to buy or sell, but I guess that's what makes a market.

The NZX returns of 24 per cent over 2012 have been fantastic for investors, especially in the context of a very tough prior five years.

Deservedly the New Zealand equity market has been getting a lot of attention.

From a capital markets perspective, these returns and initial public offerings such as the upcoming Mighty River Power float are some of the best things to have happened to the NZX in over a decade.

They help bring a new generation of investors to consider investment in different asset classes, other than property and bank deposits.

This is a great outcome for companies looking to raise capital as it broadens the investor base willing to consider investment alternatives to property and deposits. But it's not just listed equities that are back in good health.

One of the great performing asset classes has been private equity. These are the funds focused on investing and partnering with private companies.

New Zealand VIF - a fund and research entity that is part of the Crown - recently concluded a study highlighting that funds that invested in private New Zealand companies had returned more than 22 per cent a year consistently on their investments.

This wasn't just a snapshot of one or two companies - the researchers looked at 92 investments made into New Zealand companies by 13 funds over an 18 year period.

To give you a benchmark, that compares to approximately 7 per cent returns, including dividends, for the NZX over that same time period, according to JBWere/Datastream.

That's not bad for an asset class that has fallen under most investors' radars.

Importantly, the research showed, unlike most other investment asset classes, from property to shares, these returns were relatively consistent throughout the economic cycles over that time.

At Waterman Capital - a private company investor - we have a very simple investment thesis. New Zealand is a country where the bulk of our companies and wealth sit in the private markets space.

A common measure used to understand how representative listed markets are to their underlying economies is to compare listed market capitalisation to gross domestic product. For New Zealand that number is approximately 30 per cent versus Australia at 120 per cent.

Just like listed public companies, these private companies have a need for capital. Most can't access the public markets given their size or stage of growth, so firms like ours - made up of local investors - spend time working and partnering with these businesses to help them grow.

In some cases bringing them to the listed markets may happen, but put very simply, we work with these businesses to make what we consider great companies even better.

We provide the expansionary or growth capital, along with our hands-on involvement, to help and support these businesses over time.

Just as importantly we believe that we can achieve great returns for investors, and other stakeholders, by doing this.

Private company investing, or private equity, is an asset class that isn't for every investor, but it should be a consideration for those looking to hold assets over the longer term.

In general when you invest in funds such as Waterman, you make a longer-term commitment to the fund, but with industry returns of 22 per cent a year, it's a trade-off that appropriate investors should consider.

We take our role as guardians of other people's money very seriously and because of that we spend a great deal of time working with companies and understanding them before we partner with them.

With recent research highlighting that there are about 5000 companies in New Zealand with revenues of $10 million, that suggests a very large pool of companies for funds like ours to partner and provide growth capital to.

I would encourage investors, and companies looking for capital, to think of funds like Waterman when they review their options for investment.

Twenty-two per cent returns, as the advertisement used to say - it's gotta be good for you.

Lance Jenkins is an executive director of Waterman Capital.

Waterman announces investment in leading NZ education provider, Academic Colleges Group

Waterman Capital is pleased to announce its investment in one of New Zealand's leading education providers, Academic Colleges Group (ACG). ACG is the largest private school operator in New Zealand and also operates schools in both Vietnam and Indonesia. Waterman will hold a cornerstone shareholding of 24% and Executive Director Matt Riley has joined the board.

About Academic Colleges Group

ACG operates four private schools (ACG Parnell College, ACG Senior College, ACG Strathallan and ACG Sunderland) and three international colleges in Auckland, as well as two private schools in the emerging markets of Vietnam and Indonesia. It is the largest private school operator in New Zealand and has more than 4,500 students enrolled in its nine schools.

ACG offers a variety of educational programmes, from Preschool and Kindergarten through to Primary, Middle and Senior School. ACG schools offer the University of Cambridge International Examinations (CIE), which are accepted by universities in over 160 different countries, as well as the International Baccalaureate educational programmes in certain schools. ACG is the exclusive provider of The University of Auckland's and AUT University's Foundation Studies courses and also delivers intensive academic English courses with IELTS Preparation. International Students from over 40 countries are currently enrolled in ACG programmes.

Academic Colleges Group Executive Chairman Ian King says, "Waterman brings capital and expertise to assist ACG through an important period in the company's lifecycle. We have great ambitions for our students and for the business. This will certainly help us in achieving them."

Executive director of Waterman Capital, Matt Riley says, "New Zealand has a strong international reputation for the quality of its educational systems and standards. ACG has consistently delivered excellent academic results and that has positioned it as a market leader both here and abroad. We are delighted to be partnering with this New Zealand success story and look forward to working closely with management and shareholders in the furtherance of successful outcomes for all stakeholders."

Investment Attractions

Waterman was attracted to ACG for a number of reasons including:

ACG is the largest private school operator in New Zealand with 1 in 10 private pupils attending an ACG school;

ACG has a strong brand and a track record of delivering academic excellence in a country internationally recognised for the quality of its education system;

The company has a strong core in New Zealand with an exciting platform for growth in the emerging markets of Vietnam and Indonesia;

There are high barriers to entry in the education sector, particularly around the levels of capital required to establish new schools and the consistent achievement of academic excellence;

ACG's management team has a proven track record and has successfully built the company up from a single school 18 years ago to secure its market leading position today.

For further information about ACG please go to (www.acgedu.com).

Waterman portfolio company, Manuka Health, has recently been announced as one of three winners in this year's University of Auckland Business School Entrepreneurs' Challenge with the award coming on the back of yet another strong year of sales and earnings growth by the Company.

Now in its fourth year, the Entrepreneurs' Challenge was founded with the aim of supporting the export growth of value-add products. Previous winners of the Challenge include companies such as Allpress Espresso and Jucy Group.

Manuka Health's CEO Kerry Paul says "he is delighted for the Company to have been selected after a very rigorous due diligence process and against very strong competition."

Manuka Health will apply the funds received from winning the award towards clinical trials to continue to explore and validate the health and medical properties of its natural health products, allowing the Company to move with even greater confidence into its next growth phase.

Waterman Capital invested in Manuka Health in April 2012 to assist the Company to continue its rapid, export-led expansion. 

Manuka Health is a leader in the commercialisation of science-based biotechnologies for human healthcare applications and has a strong focus on research and development. It utilises the unique healing properties of manuka honey and other bio actives from New Zealand native flora and fauna (e.g. the green-lipped mussel), to produce and sell some 80 functional foods, dietary supplements and wound-care products. 

The Company exports to 45 countries, where its product is sold through pharmacies, health food stores and department stores.

Growth in the health and nutrition sector continues to be supported by a number of compelling global trends such as an ageing population, growing pressure on public health systems in the face of escalating demand, and increasing consumer awareness of health issues and the qualities of natural versus synthetic health products.

Waterman Capital is pleased to announce that Lance Jenkins will join the firm as an Executive Director from September this year. Lance has more than 19 years' experience in financial markets including senior roles with Goldman Sachs JBWere in New York and more latterly as CEO of Goldman Sachs JBWere New Zealand. For the past 4 years he has held the position of Head of Equities for the Commonwealth Bank of Australia, based in Sydney.

Lance brings extensive knowledge of equity capital markets, deal origination and capital raising garnered through a successful international career. He holds an LLB/BCA from Victoria University and an MBA from New York University. Lance is an existing investor in both Waterman funds and has assisted the firm in previous capital raising exercises.

This is an important appointment for Waterman and is the product of our discussions with Lance over a number of years. The founding directors feel that the complimentary skill set he brings will enable the firm to continue evolving as a professional private equity manager. This appointment follows that of Jacques Venter in 2011 as Investment Manager, who has proved an invaluable addition to the team. We also expect to appoint an Investment Analyst prior to the calendar year-end.