Private equity investment has hit a three-year high, returning to levels seen since the start of the global financial crisis, according to the Ernst & Young and NZVCA Monitor released today.
Private equity investment was worth $170 million in the first half of this year, with mid-sized deals most common, Ernst & Young Partner Andrew Taylor said.
"The NZVCA Monitor results from the first half of 2010 suggest a slow but encouraging recovery in the New Zealand mid-market private equity and venture capital," he said.
"While the top-end of the market is still quiet, reflecting market challenges and the small number of M&A (merger and acquisition) transactions in the segment, there was heartening levels of activity in other market segments."
Activity in the mid-sized market was returning to long-term trends after sinking in the second half of last year, Mr Taylor said.
The average investment size during the six months was $8.5m.
Investment activity levels were also expected to continue improving, NZVCA chairman Kerry McIntosh said.
"New fundraising has been relatively subdued but we have seen New Zealand growth funds successfully raising new funds, demonstrating a willingness from local investors to consider quality alternate asset opportunities.
"We expect to see renewed fundraising activity at the venture capital level following the Government's decision to provide a $40 million underwrite which is enabling the New Zealand Venture Investment Fund to commit to new funds."
NZPA