Rename the NZ Super Rugby teams

The current Super Rugby NZ team names are appalling:

Crusaders: A name celebrating religion based genocide from centuries ago (Thanks to @sportsfreakconz for that definition)

Chiefs: White people’s interpretation of a Māori culture across the region. Perhaps next time we could actually ask local iwi what name they would like to choose.

Hurricanes: We don’t even have hurricanes in the Southern Hemisphere. Lazy.


Highlanders: Celebrates Scottish colonists – not exactly friendly to the tangata whenua.

Blues: It’s like they ran out of time – and then copied the South Africans.

It’s well beyond time for these to be renamed, using an inclusive process that considers local iwi, the players along with marketability.

Posted in NZ Business | 4 Comments

Punakaiki Fund Interim Accounts – September 2017

Cross Posted from

We have released our September 2017 interim accounts, which are the half-year financial snapshot. These show that the assets of Punakaiki Fund were $31.56 million at the end of the quarter, of which $29.25 million was investments.

The accounts show a profit of $1.145 million for the half-year, but we believe the more important piece of reading is the statement of cash flows.  This shows that net cash used in operating activities was $213,000, which represents just 0.67% of total assets, or 1.35% on an annualised basis.

It helps that the cash costs were partially offset by dividend income of $138,000, which combined with a small amount of interest income represented 40% of the total cash spent on operating activities.

Most of the cash spent was on management fees, at $292,000. These fees are charged at 2% of the net asset value, plus GST, and paid each quarter in advance. The main other costs of $51,000 were for items such as insurance, audit fees and accounting fees.

Looking forward the good news is that we have received dividend income of over $200,000 for the current half-year to March 2018, so we will see another good net cash result for the current six months and the year-end accounts.

Obviously as the size of the assets under management grows we expect to see higher costs, as we increase the amount we pay for management fees, external suppliers, and we will also need to increase director fees. We do remain vigilant to ensure that the costs do not get out of hand versus the amount of assets, which is the primary reason we want to ensure we are at $100 million before we are a listed company.

Please get in touch if you have any questions.

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Punakaiki Fund Raises $3.44 million

I am very happy to report that the December Offer for Punakaiki Fund raised a total of $3,438,750, from 187 investors.

Those investors included 45 new investors, so there are now 670 investors holding shares in Punakaiki Fund.

We are very thankful for that level of support.


Posted in Punakaiki Fund

Punakaiki Fund New Investment: Coherent Solutions

Cross posted from Punakaiki Fund.

Punakaiki Fund is undergoing an offer to all New Zealand investors at the moment (closes on Thursday 21st). Read about it on the website, where you can also find the Product Disclosure Statement.


We are very happy to publicly announce our investment into Coherent Solutions.

Coherent Solutions builds advanced coherent (laser) and non-coherent light testing equipment, primarily for the development and manufacture of fibre optic telecommunication components and systems.

More simply they sell impressive, and very expensive, equipment that’s used to test the highest speed telecommunications gear.

Modular Optical Test Platform – chose your blades (examples below)

The company also has a number of new technologies in development which will expand its market from labs and advanced research and development facilities to hi-tech manufacturers.

Blades for the test platform. On the left an optical electrical converter, and on the right (or below) a variable optical attenuator (a fancy volume control for output power).

Coherent Solutions is headquartered on the North Shore in Auckland. It was founded as a spin-out from Southern Photonics, itself a spinout from some research developed by Auckland University and commercialised with the assistance of Uniservices. Coherent Solutions’ founders are Andy Stevens, who is the CEO and Iannick Monfils, the CTO, and with the help of a very talented team have built the company into a substantial business. Coherent Solutions has customers from around the world, including marquee brands in USA, China and Korea.

Coherent Solutions Optical Receivers with Teledyne Lecroy Oscilloscope. The Optical receiver converts optical signals into electrical signals that are then analysed by the oscilloscope in real time. This equipment is transmitting data at a tremendously high rate. 


Investment Details

We made our first investment into Coherent Solutions in mid November, but held off on public announcement until the other investors were ready. 

We have committed to invest half of a headline $3 million round, and aim to complete this before the end of the year (we have not yet paid it all). We also have the option to purchase a substantial additional number of shares from founders, to be completed before the end of March 2018.

The other half of the $3 million headline investment comes principally from three New Zealand based investors.

The first is K1W1 (Stephen Tindall’s vehicle), which is now the second investment, after Melon Health, where we are co-investors. We are delighted to have them join us.

We are also joined by University of Auckland’s Inventors’ Fund. This is a $20 million fund focused on investing into companies that are commercialising IP generated by researchers and students affiliated with the University of Auckland. The original IP for the predecessor company to Coherent Solutions came out of the University of Auckland, and Auckland UniServices still maintains a shareholding (via the original company) in Coherent Solutions.

The investment proposal went through the Physical Sciences Return on Science Committee, which recommended the investment to Auckland UniServices. I am a member of that Committee, and as a conflicted party (including as a Coherent Solutions director) sat with the Coherent Solutions team during their presentation, and left the room for the discussion and decision about the Committee’s recommendation. I am very happy to see these two worlds collide and welcome the Inventors’ Fund and Auckland UniServices on to our co-investor register.

The next co-investor may surprise many people – as it is the NZ Venture Investment Fund. NZVIF has two sorts of funds – the first that invested directly into Venture Capital firms, and the second (SCIF) that invests alongside angel investment groups. Each traditionally came with a lot of conditions, and I have publicly and privately fought for many years for the NZVIF influenced term sheets, contracts and ways of doing business to be simplified and improved.

Time has moved on. For this deal NZVIF us investing $500,000 using the same Shareholders Agreement and other contracts that we agreed with Coherent Solutions. We were not required to be accredited or sign any agreements with NZVIF, and are very happy to see NZVIF unshackled to act like an ordinary investor.

The press release from Coherent Solutions is below.

Coherent Solutions Raises $3 million
15 December, 2017

Coherent Solutions, a world leading provider of high-end testing equipment for the optical telecommunications market, announced today the completion of a $3 million A-Series investment round. The investment round was led by New Zealand’s Punakaiki Fund and supported by K1W1, NZVIF, and Auckland University’s Inventors Fund.

Based in Auckland, Coherent Solutions develops and manufactures advanced test & measurement solutions for the optical communications market – a core technology of the global internet. “Our instruments are used in many of the leading research labs across the globe by scientists and engineers developing the next generation of telecommunications technologies” says co-founder and CEO Andy Stevens.

In 2018 Coherent Solutions will launch a series of new products with two new strategic partners, opening new markets and creating opportunities for significant revenue growth. The funding will be used to accelerate the development of products for these partnerships and to increase sales capacity.

Andy Stevens says “This is our first funding round, which comes after five years of strong organic growth. We now have several very large customer-driven opportunities where we needed external funding to drive forward. We are focused on driving rapid growth over the next three years, and that means new products, new partnerships and a much larger team.”

The Coherent Solutions brand, which has a strong reputation in high-end research labs, will now start to appear in production lines for fibre optic communication systems, modules, and components.

Andy Stevens will be joined on the Board by co-founder Iannick Monfils, and Lance Wiggs, from Punakaiki Fund. The company intends to add an additional two Independent Directors over the next few months.

“Coherent Solutions will be a substantial investment for Punakaiki Fund” states Lance Wiggs, “and has the potential to be our largest cash investment, if we include our arrangement with founders. We see that with global demand for data and bandwidth ever increasing the demand for testing equipment to run ever more sophisticated optical communication networks will also increase. Coherent Solutions has impressed us by their ability to gain a foothold into this global market which is dominated by large, multinational instrumentation companies, and have a well-defined growth strategy. We are excited to be part of this successful New Zealand story”.

Posted in Punakaiki Fund

Punakaiki Fund December Offer – Now Open

Punakaiki Fund’s regulated offer to New Zealand investors for December 2017 is now open, and will close on Thursday 21st December. The next retail offer will not be until after 1 August 2018.

Read the Product Disclosure Statement

New investors are able to participate by filling out the application form at the back of the PDS, or, more simply, though our online process below:

Read more about the highlights of the Offer on our investor page. As always the PDS is the definitive source of information for this investment.

Posted in Punakaiki Fund | 2 Comments

Linewize Acquired by Family Zone (ASX:FZO)

Cross post from Punakaiki Fund

We are delighted to announce the sale of Linewize to Family Zone Limited (FZO.AX). Family Zone have released a comprehensive announcement to the ASX.

Why the combination works
There was almost immediate agreement, at the start of negotiations, that the combination of Linewize and Family Zone was good for both businesses. Linewize provides world-leading technology for firewall, filtering and classroom internet management tools, and has 260 New Zealand schools on board. Family Zone has a disruptive business model (selling on-device filtering software to parents via school mandates) and is growing very quickly in Australia, and can rapidly expand the use of Linewize’s technology. They have also signed deals with large telecommunications providers. The combination is a strong sales and marketing engine on top of some excellent technology, and better geographic coverage for all.

Linewize founders Scott Noakes and Michael Lawson were very keen to join Family Zone, and we collaboratively worked with them and Family Zone to arrive at a negotiated agreement that is good for all parties.

Family Zone will acquire 100% of the Linewize shares in return for up to 19 million shares in Family Zone, along with a small deposit of $200,000. Half of the Family Zone shares are “Performance Shares” and are only released, in five tranches, when certain performance hurdles are met. See the Family Zone announcement for more on this.

There is a short due diligence period now, after which the deal becomes unconditional. The issue of Family Zone shares as compensation will need shareholder approval at a Family Zone shareholder meeting, likely to be in late November. If the Family Zone shareholders do not approve the issue of Family Zone shares then the consideration price will be paid in a fixed amount of cash.

Founders Scott and Michael put in place a generous ESOP plan before Punakaiki Fund invested, and so the current and recent employees will share 16% of the consideration, as well as staying on with the business. Scott and Michael each receive 32% of the consideration. We are delighted with the result for Scott, Michael and the team, and commend them on their efforts and on this deal. Scott and Michael will stay with the business as executives, and will each be issued 1,000,000 Family Zone Executive Performance shares in addition to their base compensation and their consideration from this sale.

Punakaiki Fund Result
Punakaiki Fund holds 20% of Linewize, after an original investment of $1 million, spaced between June and December 2016.

If the Family Zone shareholders do not approve the issue of shares then Punakaiki Fund will receive AU$1.33 million (~NZ$1.5 million) in consideration shares, and the performance share compensation will be issued as cash using the share price at the time. We see that shareholder approval is highly likely.

Family Zone is a small company with a share price that has appreciated very quickly since their IPO a year ago. To provide against any risk of the share price falling between now and the Family Zone shareholder meeting, if volume weighted average price (VWAP) of the Family Zone shares is under AU$0.70 for the five days before the meeting then Punakaiki Fund’s number of shares will be increased to compensate. The share price closed last Friday at AU$0.855.

Punakaiki Fund will receive 1.9 million Shares and 1.9 million Performance Shares in Family Zone, as well as $40,000 from the deposit. We will use some or all of the deposit to contribute to deal costs and ensure the working capital is acceptable at the time of the transaction. At Friday’s closing share price of $0.855 per share this has a face value of AUD$3.29 million, or NZ$3.69 million. However the consideration is in listed shares, and half of them are locked up until (or if)  performance targets are met, so the value could go up or down.

Extracting Value for Punakaiki Fund

Punakaiki Fund will be able to sell the initial 1.9 million shares as soon as they are received after the Family Zone shareholder meeting. However at this stage we do not know what our strategy will be, and we are conscious that we will have a relatively large holding and will exercise caution whatever our decision.

Wholesale Round

It’s older news, and was covered at the Punakaiki Fund AGM, but we realised that we had not released the official results for the July 2017 Wholesale Offer. We closed this offer in early September, after being extended twice by the Board. The Board firstly elected to extend the offer until the end of August, and then another few days to allow the finally paperwork and funds to be received.

We deliberately kept a low profile for this offer, with very limited engagement with prospective investors. We were delighted with the result of $1.8 million raised from 11 investors, and welcoming 9 new investors.

Investor Statistics
We now have a total of 625 investors, with an average holding of just under $44,850, at $20 per share. That’s more than several listed companies, including Family Zone.

As a sign of our success with larger investors, we now have 80 investors with holdings, again at $20 per share, of $100,000 or more, and 130 with $50,000 or more.

Posted in Punakaiki Fund

John – the real issue here is results, not dance partners

John Hart has written a series of tweets about why a Blue Green coalition wold not work.

That saddens me. It’s the politics of can’t, or lack of hope. A smart party would be working all sides of a deal to find the bet path forward for their policies.

At stake is the rapid pace of Climate Crisis and of the adoption of electric vehicles, distributed power, batteries and so on. The Green party have been thinking about these issues for a long time and have a series of polices and people that will set our economy and society up to succeed in the times of turmoil ahead. It’s not time ti hiker down for another three years, but time to cut a deal, a good deal, with whatever party is going to be leading the new government.

At the moment the Greens have zero negotiating power – they have ceded it all to Labour by refusing to treat with National, and their members are not helping their own cause by reiterating the same. By painting themselves into this corner they will either end up in opposition again, with limited action on the causes that matter, or they will get what they are given in a red black and green coalition. Labour knows that the Green Party will join them in coalition no matter what, and can afford to offer a far better deal to NZ First.

But what if NZ Greens treated with National? They might be offered a better deal than from Labour and NZ First. That deal would change the brokers of this election from NZ First to NZ Greens, and then the negotiating could really get going.

Imagine a Greens deal for National that required:

1: Climate change as part of every cost benefit analysis/policy document, and a significantly boosted part of the Business Growth Agenda, with carbon emissions costed at $50 per tonne rising to $100 per tonne over 10 years. (This will drive transport and mining decisions)

2: $500 million per year allocated to cleaning up rivers, funded by a tax on farmers who are not abiding by a Sustainable Farming Code of Conduct. Fund decreases as farmers move into more compliance.

3: A falling cap on the amount of land used for cattle farming. Farmers will like it as their land will become more valuable.

4: $200 million per year into a series of linked habitats for native birds, and creation of 10km wide marine sanctuaries every 50  km of coast.

5: Julie-Ann Genter as Minister of Transport, James Shaw for Climate Change etc

6: Local bodies required to prepare for 1.9m sea rise from climate change, per the hidden report

7: Moratorium on any new mining or drilling operations, and increase of royalties of 4x.

8: Agreement to settle water rights with iwi and to allow each iwi/region to set a price for their water. Minimum price to apply.

9: Introduce a carbon tax at $5 per tonne, rising by $5 in the second year then $10 per tonne per year for 9 years. Charge it like GST with cascading carbon tax applying. No exceptions, including farming.

10: Use the proceeds of the carbon tax to invest in carbon reducing systems (public transport, lower methane emissions from belching cattle) and to subsidise entities who spend more money to lower carbon emissions.

11: Take 100,000 children out of poverty in 3 years, where poverty is defined as <definition> and annual targets are met or coalition fails.

I can imagine National negotiating and then agreeing to some, most or close to all of this. Some of it would be very tough, no doubt, but they have already agreed to 11, understand how to do 8 in a way that doesn’t destroy businesses and farms and are excellent at implementing big projects – this time public transport instead of roads. Some of the others are relatively cheap, and the biggest issue (and something worth fighting for) is the carbon tax, but if done well can be used to lower business and personal income tax – long a National goal.

That’s a Blue-Green Coalition. It aims to achieve goals for both parties. And a coalition like that would leave both parties stronger.

Why would Green Party members not support this? The answer is perhaps “because we don’t like National because of past behaviour” or “We don’t want to be crushed by being a coalition partner to National

These are selfish motivations, and quite unlike the entire ethos that Green Party lives by. I’ve always seen the Green Party as a movement that is endeavouring to achieve certain environmental and societal goals, and they have welcomed it when other parties have adopted their policies. A coalition agreement like the above is one where they would achieve genuine lasting change could be put to members, and members strongly encouraged to vote.

Ideally another agreement with Labour and NZFirst would also be presented, and a genuine dilemma could emerge. What if they can achieve more with National than with Winston and Labour?

Real change happens when you move the normal – and there is no better way to change society to be Green than by moving National towards the solidity of long term green economics.

Posted in NZ Business | 1 Comment