Investment group eyes NZ
iMatrix wants to make 30 multi-million dollar investments this year
Thursday, March 24 2011 || News || BY Lesley Springall
The new investment group, iMatrix, includes some of the oldest and most well-heeled families in the UK. It was brokered by Knowledge Matrix (kMatrix) ─ a UK management consultancy firm ─ which analyses business risk using more than 20 years of comparable data, and advises clients on the best direction to take to maximise returns.
Mark Copsey, a director of kMatrix’s New Zealand office and former New Zealand Trade & Enterprise (NZTE) staffer, says iMatrix was born following a NZTE-funded project that looked at the potential of New Zealand’s fledgling titanium industry. “We were looking at how New Zealand might create a $1 billion business out of the titanium capability that exists here. As part of that we talked to a bunch of investors in London (who we’d worked with before) about their appetite for titanium and New Zealand and their response was very strong.”
That was three years ago and since then there has been a flurry of activity assessing New Zealand’s investment potential across a range of sectors, says kMatrix’s founder Steve Howard. “This has not been an overnight decision. It has been carefully thought through. We now have a good idea of the technological opportunities in New Zealand ... and because of the relative scale of New Zealand we believe we can actually make a demonstrable difference, and that drives me personally.”
The investment group iMatrix was launched in Wellington this week and will be introduced to those hoping to get a slice of the ₤1 billion-plus capital pie in Auckland next week.
Fronting the investment group is Tom Clifford, the 14th Baron of Chudleigh and a long time supporter of New Zealand. Lord Clifford’s family ties go back to the 1850s when his ancestors first bought land in New Zealand, apparently introduced the first merino sheep and held office in the House of Representatives. One hundred years on, Lord Clifford has land, property and vineyards in New Zealand, and admits he has strong emotional ties to the country and people.
Other Kiwiphiles in the group include Philip Farrer, a former Merrill Lynch and Bank of America executive ─ who until recently was based in New Zealand ─ and Bernard Cazenove, a member of NZTE’s Beachheads European Advisory Board. In total, 30 high net worth individuals from the UK have pledged capital to the group, with another 170 individuals and institutions from the UK and further afield, on the sidelines. Included in the core 30 are well known English businessmen George Rolls, Crispin Comonte, Richard Finston, Jonathan Allen, Viscount Portman (the owner of several London properties), and former American Water and Thames Water chief executive Jeremy Pelczer.
Copsey says iMatrix was set up as a group rather than a fund so that it wasn’t bound by restrictive fund rules. “So if a project requires $200 million, we can fund it. We are not fund managers. This is born from 300 years of mercantile activities, where individuals have clubbed together to make investments.”
The group will consider projects requiring sums from several hundred thousand dollars to $200 million, but the projects are more likely to be in the $5 million to $50 million bracket. The recipient business must have a proven technology that is significantly scalable, says Copsey. “It needs to be capable of being leveraged on a global basis. There are lots of companies in New Zealand that have hit a buffer. They’ve got good technology, but can’t expand quickly enough.”
As well as the titanium industry, other potential investment candidates include the equally immature high temperature superconductor industry and New Zealand’s growing cleantech sector. But there are no strict rules. For example, kMatrix is quite far down the track with assessing an earth moving equipment company for one investor syndicate within the group, says Howard.
Given kMatrix’s experience and abilities, however, Howard is particularly keen to look at supply change financing in New Zealand, where kMatrix can secure investment across a range of related technologies, which if grown together can accelerate the end technology’s path to market.
With several businesses being assessed currently, Howard expects the group to have made 30 investments within the next six months. “That’s very reasonable. You’ve got to have critical mass in your deal flow if you are to tolerate the failures.”
But that’s the caveat. If New Zealand can’t come up with that deal flow, the group will look further afield in Australia and across Asia Pacific. But, says Copsey, “if I’m kept busy here, I’m kept busy here.”
kmatrixap.com
