3 Reasons to invest in Punakaiki Fund Limited (Closing Tomorrow)

We generally hold one retail offer per year for people to invest in Punakaiki Fund Limited. As is normal this year’s offer has a Product Disclosure Statement (PDS), and investors can apply online using our simple system.


Click here to apply online

Three Reasons to Invest in Punakaiki Fund Limited

1: Our investor net asset value per share is above the Offer price

The new September quarter-end valuation, as assessed by the Punakaiki Fund Board last week, increased total assets to $42.4 million, up from $40.6 million in the PDS.

The Investor Net Asset Value (iNAV) per share increased  from $21.22 in the PDS to $21.93.

Obviously the iNAV per Share at the end of September of $21.93 per share represents a good premium over the Offer price of $21.50 per share, and it is good to see the iNAV per share moving upwards. 

2: Your investment will help address the funding gap (and opportunity)

In New Zealand we have increasingly well functioning and highly active pre-seed and seed investment communities, and hundreds (really!) of companies are coming through looking for their next round of funding.

Many, including companies we have already invested into, are superb investment opportunities, and the next series of companies that will deliver results like Xero, Diligent, Pushpay and A2 Milk are almost certainly on our lists of potential investments.

However there is a very large opportunity gap for companies looking for VC investments, as the chart using data from a ministerial briefing earlier this year illustrates. Note as well that our average VC investment size of about $2 million is tiny versus US equivalents of $10 million.

Companies graduating from the Angel and Seed stage often struggle to continue their growth as their funding prospects diminish. Many companies go into a “lean” mode, retaining higher shareholding percentages for founders and early investors at the cost of building their businesses more slowly than they otherwise might. This can lead to some positive behaviours and excellent results, but we’ve also seen too many companies miss out on global opportunities as others move more quickly to take the space.

Punakaiki Fund is addressing some of that gap. The chart below shows that almost 3/4 of our funds invested to date are placed with companies where we have cumulatively invested over $1.5 million (generally over multiple investment rounds). It also shows that 97% of our investments are where we have placed a cumulative total of over $500,000 per company.

About half of those funds were invested since January 2017 – when we raise funds we tend to invest them very quickly.

The charts combine to show that we are primarily operating in VC space. There are very few players able to serve the needs of companies seeking funding at this level, and we are constantly seeking more funds ourselves to continue to address the overwhelming opportunity for New Zealand.

Obviously as investors facing very high demand and low supply we are able to pick the best opportunities.

3: Anyone can invest
This year we set a low minimum of just $215 (10 shares), mainly to ensure that most people can participate and to take away a reason not to invest.

As a pleasing result we have seen investors (including our own family) take advantage of the low minimum to purchase shares for their children. However given that the Offer closes tomorrow to avoid disappointment (the application paperwork for children is a lot more demanding) please consider investing under your own name first, and then transferring the shares after the Offer closes. We also ask that investors consider trusts and companies only for larger investments – again shares can be transferred after the Offer closes.

The offer closes tomorrow, Wednesday at 5pm
Invest online at punakaikifund.co.nz/invest

Alternatively, download the Product Disclosure Statement and apply using the application form at the back, scanning and emailing.

Published by Lance Wiggs