There’s romance in the air! Kiwisaver, slightly immature but showing a lot of promise, has been keen on a relationship for a while: Good looking returns, and ideally not a long distance love affair would be ideal. Private equity has been living at home for a while now wondering if she’ll ever move out and attract decent levels of interest without having to move abroad. It all started at an office work party and the rest is history!
Sam Stubbs, CEO of Simplicity Kiwisaver joins us along with Robbie Paul, who heads up Icehouse Ventures to discuss these topics and more.
‘Icehouse Ventures will be co-owned between The Icehouse start-up accelerator, Sir Stephen Tindall’s investment company K1W1, Simplicity and investment banking firm FNZC.’ See article here
Kiwisaver is now approaching $50b in funds under management – this is on track to grow closer to $200b FUM by 2030 – in just 11 years time. Where’s that money currently invested? Well, about 36-37% is invested in NZ markets but unfortunately, this proportion is shrinking. Is it ‘good enough’ to have such a narrow focus on the objectives of investing as to increase returns whilst minimising risks? What about the spill-over effects associated with home-grown startups?
Meanwhile, startups in NZ struggle when they approach ‘the gap’, the period of time where capital requirements range from $1m-$10m – the funding just isn’t there to the extent that it needs to be. The result is that many startups end up going offshore and whilst NZ still benefits to some extent, it’s not to the fullest extent.
We’ve had Simeon Burnett (episode 23) from Snowball Effect and Tim Preston (episode 32) from CM Partners on the show to discuss the gap in a bit more detail if you want to check those episodes out.
From the perspective of the NZ Everyday Investor, there’s a theme running through this episode: Quantitative easing and demographic shifts are causing persistent and low-interest rates. More investment flows through to equities and property markets as a result. Technology and the speed of innovation are democratising investing options – the financial market place is transforming. Blink and you’ll miss it – NZ, we’re at the crossroads right now. As investors, the end result is that the appetite for risk MUST increase in order to get a meaningful return. The only way to mitigate risk is to increase the investment time horizon.
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