We are a highly collaborative partner, working actively with our portfolio companies and providing market leading transparency to our investors.
What We Look For
We partner with shareholders and successful management teams of established New Zealand companies. We look for opportunities where the business has a track-record of positive earnings and the potential for further growth. We operate in the mid market, which means we typically invest in businesses with enterprise values of between $20 million and $100 million. We also support management teams to buy out other shareholders or buy in as a result of a change in shareholding. Investment opportunities may also arise as a result of founders or existing shareholders de-risking their personal investment or planning for their succession.
Pencarrow is a signatory to the Principles for Responsible Investment (PRI), which is a network of investors who seek to incorporate environmental, social and governance factors into their investment and ownership decisions. The PRI is supported by the United Nations. We believe that by considering environmental, social and governance factors in everything we do we have a strategic advantage and will create better performing companies in the long term.
We are thematic investors and partner with companies that typically fall into one or more of the following categories
Emerging Global Champions
These are companies that are addressing a niche segment in a global market. New Zealand is a great experimental test bed and these companies are expanding rapidly across the globe due to a differentiated market position.
Examples of investments in this category include Seequent, Icebreaker and phil&teds.
Leading Domestic Players
Companies that are market leaders in New Zealand and have strong and stable cash flows. These companies typically have an offering that could enable international expansion in the future. Examples include BrewGroup, Essano, MMC and BJ Ball.
A Platform for Industry Consolidation
Attractive industry dynamics with multiple market participants often creates the opportunity for consolidation and the creation of a clear market leader. This approach allows businesses to scale rapidly as sales are pooled and operations are streamlined. Examples include Umbrellar and BrewGroup.
Ready to Rollout
We work with successful management teams with a proven business model to achieve scale and capture market share through expansion nationally and/or internationally.
Examples include solarZero and BeGroup.
Pencarrow’s disciplined approach to investing has produced strong returns for its investors
Experienced and Disciplined Investors
We are the most experienced private equity manager in New Zealand. We have a disciplined approach to investing and management of our portfolio. Our Investment team have been working together for over 10 years and take guidance from our external independent investment committee. We operate an active governance model, proactively identifying and managing risks.
Investment Blueprint to Deliver Value
Before making an investment we work alongside senior management to develop a comprehensive plan to deliver growth. Typically we will appoint two Pencarrow board members to augment the company's existing capabilities. We will often recommend additional independent appointees that complement us and management. Our investment team often assists portfolio companies to arrange financing, negotiate acquisitions, implement operational improvements and create strategic opportunities.
Compelling Competitive Position
We are one of only a few managers investing in mid-market New Zealand businesses. Traditionally we have seen good deal flow across all economic cycles as the New Zealand economy is dominated by SMEs. Unlike other managers, we employ a thematic approach to investment and are not constrained by any particular criteria. We often win competitive processes on non-price factors.
Superior Investment Selection
Historically Pencarrow has successfully executed its investment theses, across a range of economic cycles. We put that down to our superior investment selection, as well as our established relationships and access to a broad range of financing options. We develop rapport with high quality managers who share our ambitions for growth in the business before making any acquisition.