We want you: 2 new jobs to help manage Punakaiki Fund

We’ve just posted two new jobs for LWCM – one senior and one junior.

The Investment Manager role will be delegated significant responsibility, and the right person will eventually lead a team of people. We have a lot to do and this person will get it done. The person we hire could come from a wide variety of backgrounds – career switchers (e.g. from law, high growth companies, consulting) are welcome.

The Investment Analyst role is primarily about creating and curating powerful financial models, but also helping with everything else we do. Chris and I both have a solid history in creating big excel models, so the pressure is on.

In reality we are looking for great people – and will tailor the roles to suit.

These roles will be our first new hires, and will be significantly important to the future of Punakaiki Fund.  Let us know (lance@lwcm.co.nz) if you know anyone who could be suitable, or apply yourself either via email or through the Seek links above.

 

About LWCM

LWCM is the manager of Punakaiki Fund Limited, an investor in privately-held, high-growth New Zealand companies, currently with $37m of assets, 20 investments and 676 shareholders. Punakaiki Fund is the only VC fund open to retail (as well as wholesale/institutional) investors, and has grown from $1.5 million to $37 million in assets in just 4 years. We continue to to raise funds each year and are targeting $100 million and an IPO late in 2019. Our current investments include Coherent Solutions, Conqa, Melon Health, Weirdly, Raygun, Populate, Mobi2Go, Vend, Timely, Onceit and Devoli. Three of the companies qualify as Maori in business, seven have women founders or co-founders and ten have (or have had) founders with married or otherwise committed partners in the business.

LWCM was founded by Lance Wiggs and Chris Humphreys.

Lance was the sole advisor on the sale of Trade Me to Fairfax for $750 million in 2006. He has founded or co-founded several companies, advised hundreds of NZ companies on funding, growth, turnaround and exit – including over a hundred formally through NZTE’s Better by Capital and Better by Design programs. Lance has an MBA (Strategy, Finance) from Yale and a B Tech (Product Development) from Massey, and work experience including McKinsey & Co., BHP Billiton and EBRD. Lance is a director of eleven portfolio companies.

Chris is a CFA Charterholder, has two finance degrees (Otago and Canterbury) and a BSc, and was into heavy analytical work in his time at PwC Corporate Finance and Pacific Fibre. He grew up in the South Island and currently lives in Te Anau. Chris is a director of two portfolio companies.

Chris, Lance and LWCM have made 66 investments, with 25 made in the last year. LWCM runs two to four fundraising exercises for Punakaiki Fund each year, and has successfully completed four regulated retail offers.

With significant recent growth of Punakaiki Fund and more growth ahead LWCM has created two new roles to assist with the increased workload across a wide range of functions.

Investment Manager Role

The Investment Manager will take responsibility and accountability for increasing amounts of LWCM’s work, including sourcing, assessing, closing and advising portfolio companies, raising funds, PR and promotions and governance, compliance and administration.

Initially we expect a significant amount of time wil be spend on taking over and improving existing processes within LWCM and Punakaiki Fund. Beyond that the work will be varied and range up to potentially highly complex advisory tasks, financial modelling, negotiation and contract forming. The role will continue to evolve as LWCM hires more staff and Punakaiki Fund expands, moving to and beyond an IPO.

We also expect the Investment Manager will take on responsibility (through an investment allocation) for an initially small, but growing part of the assets under management. You will get hands-on experience, responsibility and accountability. 

Skills and experience

We are looking for great people who can bring some, but not necessarily all, of the following skills:

  • Great comfort with excel and numerical analysis – preferably but not necessarily financial analysis (a CFA would be excellent). 
  • Strong writing and research skills, including comfort with legal documents.
  • Smart, inquisitive wide ranging perspectives on the world, industries and business models asked by strong analytical and strategic thinking.
  • Ability to take responsibility – to lead, manage, self-organise, make decisions and deliver results individually and as part of or leading a team.
  • A degree or post-graduate degree in an analytical field of study, along with an excellent academic record.  A CFA/CA/CAIA qualification and/or MBA (with finance concentration) from a top business school would be beneficial.
  • Five or more years of demonstrated work experience in a related field. 

You may have experience in law, corporate finance, consulting, be from the high growth start-up sector, enterprise or the VC/PE sector. We are willing to contemplate a wide range of backgrounds and are looking for evidence that you are able to learn quickly to be able to help assist LWCM, Punakaiki Fund and companies we have invested into. 

 

Investment Analyst Role

The Investment Analyst will be actively involved with many areas of investing, portfolio management and Punakaiki Fund administration. The Investment Analyst is expected to add capacity to the existing LWCM team, and lead projects to deliver results across a wide range of areas. 

The Investment Analysts work will be centred around developing and maintaining financial models for existing and potential portfolio companies. These will be underpinned with researched assumptions and data, supported by dashboards and will help drive decisions and valuation recommendations for LWCM. You will also help monitor and support Punakaiki Fund portfolio companies, perform due diligence for potential new investments and draft, maintain and track investment cases. 

The Investment Analyst will also perform include high quality research, initiate and implement process improvements for the management of Punakaiki Fund and LWCM’s internal processes, and complete one-off task such as assisting with capital raising activities. You will also assist as Punakaiki Fund approaches its IPO in 2019.

We expect that the role will evolve over time as you gain experience and achieve results, with more time being spent assisting portfolio companies, financial reporting and investing with the prospect of responsibility (through an investment allocation) for an initially small, but growing part of the assets under management.

Skills and experience

We are looking for great people who can bring some, but not necessarily all, of the following skills:

  • Great comfort with excel and financial analysis
  • Strong writing and research skills, including comfort with legal documents.
  • Smart, inquisitive wide ranging perspectives on the world, industries and business models asked by strong analytical and strategic thinking.
  • Ability to self-organise, make decisions and deliver results.
  • A degree or post-graduate degree in an analytical field of study, preferably finance along with an excellent academic record. You may have or be studying towards a CFA or similar. 
  • At least two years of demonstrated work experience in a related, financial, field. 

You may have experience in corporate finance, consulting, accountancy or PE/VC, or have performed finance roles for the high growth start-up sector. 

Posted in NZ Business

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 PunakaikiFund.co.nz

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.

Posted in Punakaiki Fund

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 PunakaikiFund.co.nz 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:

Punakaikifund.co.nz/InvestNow

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