$100m fund to aid businesses lacking access to capital
WEALTHY businessman and philanthropist Sir Owen Glenn is setting up a private lending fund to provide mezzaninetype funding for small to mediumsized businesses.
Sir Owen, 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 $5 million to $10 million and will be administered on commercial terms.
‘‘Lending rates and security will be appropriate for the level of risk to be taken,’’ Sir Owen said in a statement.
‘‘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,’’ Sir Owen said.
He highlighted the recent Capital Markets 2029 report, which noted access to capital finance played a vital role in supporting the growth and productivity of New Zealand and expanding employment opportunities.
The $100 million fund will be managed by Birnie Capital, whose principal Bill Birnie also oversees Sir Owen’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.
Mr Birnie said Sir Owen 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 Sir Owen’s background in logistics, the fund was likely to 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 led to an increase in alternative lending in New Zealand in recent months.
Australian nonbank 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.
Sir Owen, who made a fortune from selling his company OTS Logistics Group in 2012, said he would invite other high net worth businesspeople to invest in the fund. — The New Zealand Herald