Glenn sets up $100m finance fund
Businessman sees lack of adequate capital hamstringing NZ firms’ potential success
Wealthy businessman and philanthropist Sir Owen Glenn is setting up a private lending vehicle to provide mezzanine-type funding for small to medium sized businesses.
Glenn, who is battling serious health issues, says the $100 million fund will be structured to provide finance for businesses struggling to access capital or borrow from traditional banking sources.
He says he will form an investment committee made up of close colleagues and advisers from New Zealand and overseas to oversee lending and the credit criteria of borrowers.
Initially the funding provided will range from $5m to $10m and will be administered on commercial terms.
“Lending rates and security will be appropriate for the level of risk to be taken,” Glenn said in a statement to the Herald.
“The problem for many of our potentially successful businesses is a lack of adequate capital and a restricted ability to borrow enough to fund efficient expansion of their activities.”
He highlighted the recent Capital Markets 2029 report that noted access to capital finance played a vital role in supporting the growth and productivity of NZ and expanding employment opportunities.
The $100m fund will be managed by Birnie Capital, whose principal Bill Birnie also oversees Glenn’s family office, New Zealand business and philanthropic activities.
The lending entity providing the funding will be registered as a financial service provider under the Financial Services Providers Act.
Birnie said Glenn had seen a gap in the market to provide finance to companies looking to grow their businesses. While the fund would initially focus on providing loans, it might also make direct investments in private equity fashion.
Given Glenn’s background in logistics, it’s likely the fund will focus on export businesses including agriculture and horticulture but also manufacturing and tourism, he said.
“Sir Owen is concerned that New Zealand businesses seem to be falling behind where they could be if adequate capital support was available.”
A general tightening in the credit market has seen an increase in alternative lending in New Zealand in recent months. Australian non-bank lender Pepper Money launched mortgage lending operations here in September while others such as Bluestone have ramped up business lending over the past few years.
However, there are very few finance companies remaining after the sector meltdown a decade ago.
Glenn, who made a fortune from selling OTS Logistics Group in 2012, says he will invite other high net worth people to invest in the fund.
Last year Glenn promised to leave the bulk of his estimated $450m wealth to charity after finally extracting a large chunk of that out of the ill-fated Warriors league joint venture with Eric Watson.
While he’s still waiting for about $50m, Glenn has continued his philanthropy which includes a $7.5m donation for the University of Auckland Business School.