New Zealand's private equity and venture capital market sank like a stone last year, recording a fifth of the previous year's levels.
A total of $111.4 million was spent on 62 private equity deals and venture capital in the year, down $442m, the Private Equity and Venture Capital Monitor says.
The fall was caused by an absence of large transactions against a very strong year, the New Zealand Venture Capital Association said.
Last year "was a year of lingering uncertainty impacting M&A activity globally", association chairman Matthew Houtman said.
Ernst & Young partner Andrew Taylor said that although no large buyouts were disclosed last year, significant deals had been completed late in 2011 and early this year.
The timing and impact of large transactions was unpredictable, he said. "It is the nature of a small economy."
Mid-market investment declined from a high of $233m in 2011 to $84.6m, but appeared to be returning to typical pre-2011 levels.
The money was spread across 12 deals, the same number as the previous year, but the value of the average deal slumped from $18.6m to $7m.
The activity had been underpinned by private equity managers who had several successful capital-raisings during the year.
Early-stage and venture capital investments were also hard hit, down from $36.6m in 2011 to $26.8m, reflecting "shallow pools of new capital available for companies seeking to raise capital in the $2m-$10m range".
Houtman said New Zealand was following international trends of lower deal sizes.
- ? Fairfax NZ News
Source: http://www.stuff.co.nz/business/industries/8572455/Private-money-runs-dry
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