Despite the tough economic climate, investment firm Direct Capital says the private equity market is very lucrative, wetting the appetites of new investors.
In its latest capital fund, Direct Capital has raised more than $200 million since January and soon expects to achieve its target of $250 million. Just over $80 million was raised by mum and dad investors.
Direct Capital says the funds will be invested in private companies valued between $25 million and $150 million with revenues of more than $20 million, some of which will list on the New Zealand stock exchange soon.
Direct Capital managing director Ross George says its investors, on average, have seen a 20% return on investments within three years.
Mr George says the private company market is New Zealand's largest equity market, and is between five and seven times larger than the stock exchange.
