KiwiSaver providers consider private investments

John Johnston, of Milford Asset Management, said a disproportionate share of New Zealand’s economic output was concentrated in the hands of privately-owned enterprises rather than being accessible to investors via the listed market.

He said there were 243 businesses with a turnover greater than $200m and 2490 companies with turnover of between $20m and $200m. The average return on assets of the 2490 companies in 2015 was 5%, double the average of 2.5% return for businesses of over $200m in size.

“We believe these attributes taken together make the private company market in New Zealand an attractive place to look for compelling growth investment opportunities.  In fact, Milford has had a successful track record in this market with 12 Milford Active Growth Fund private company investments over the past five years.”

Brooke Bone, who manages the private investments for the Active Growth Fund, said the private investments had performed very well and were well ahead of the overall fund performance, which sits at 13.7% over the past year.