December 2006

Another dynamic year in New Zealand's private capital market is drawing to a close and there have been plenty of deals to mark its end in style.

Look out below as well for a message from the new NZVCA Chairman, Hamish Bell of ANZ Capital.

In late September Endeavour i-Cap and Ngai Tahu Equities invested into Veritide (out of the University of Canterbury’s commercial arm, Canterprise) and Oamaru based dGV (de Geest Ventures) has now invested in three companies in 2006 including Paric Ltd, an Auckland based company. In early December, BioPacificVentures invested in Queensland company Horizon Science, which has developed a technique for retaining rich nutrients from parts of the sugar cane that are normally discarded during processing.

On the Private Equity side, ANZ Capital recently exited its investment in United Carriers Group, the dominant regional transport operator north of Auckland and most recently we have seen the PEP acquisition of Independent Liquor and the Ironbridge Capital acquisition of EnviroWaste Services.

In people news, Victoria Pilcher (most recently with Morel & Co) has joined the ANZ Capital Team as a Manager and Greg Cross has been appointed to the board of business accelerator the ICEHOUSE, with Microsoft’s Sean McBreen as his alternative.

The new NZVCA Council was elected in late September and Council members for the 2006/2007 year are Hamish Bell, ANZ Capital (Chairman), Franceska Banga, NZVIF (Vice Chair), Tony Bishop (iGlobe Treasury), Mark Edwards (No 8 Ventures), Darren White (Ernst & Young), Andrew Lewis (Simpson Grierson), Martin Turner (Falcon Private Equity), Richard Hughes (ING Peal), Steve Hampson (Canterbury Innovation Incubator and Powerhouse Angel group), Stuart McKenzie (Endeavour Capital) and Brent Lawgun (Goldman Sachs JBWere Private Equity. And in breaking news we are pleased to announce that Nikki Brown of MVision (London) has joined the Council this week as well. Contact details for all Council members are set out in the “About Us” section of the NZVCA website.

What a year it’s been - and it’s still not quite over for many in the market!

The industry has changed markedly over the last 12 months - who would have guessed a year ago we'd be seeing the continuing level of activity we are now seeing - on both sides of the Tasman. I'm sure that the year ahead will continue this trend.

One of the things I set my self as a goal to achieve when I took the Chairman's role in October was to work with the NZVCA Council to take stock of where the industry is and what role we as an Association can play in the years - and years - ahead. I'm pleased to say that we had a very useful strategy session at the end of November on this subject and on focusing our priorities for the year ahead. More on the detail of this in the New Year - but by way of summary, a few of the key outcomes are listed below:

- Broader PE/VC Industry Focus - as a group we are keen to represent the interests of the whole industry - including both professional funds and individual investors, and representing all stages of the market - angel, seed / early stage, venture capital and private equity. To this end, we will be targeting activities in the year ahead to each of these segments - including mid-year segment forums for VC, PE and Investor Groups.

- Name Change - reflecting this broader focus, and in line with a similar move at AVCAL, we will be changing our name in the new year to "The New Zealand Private Equity & Venture Capital Association" - however will retain the acronym “NZVCA” as the core underlying identity.

- Priority Activities for 2007 - The following are the core activity areas for the year ahead:

> Education & Awareness – VC and PE training material and road shows, Guide to PE & VC

> Events – Annual conference, mid year forums (PE, VC, Investors), regular networking events

> Lobbying & Industry Representation - including development of standard documentation where relevant >Publications & Research – Annual Yearbook (including Guide to PE & VC), NZVCA Monitor, special research on selected industry topics

>PR & Marketing – Media relations and proactive media comment

Vote of thanks - My thanks to all members of the Council and to others who have added their weight to the industry in the last year. Special thanks of course to Christopher Twiss, without whom the Association would not continue to prosper.

On behalf of the Council, can I take this opportunity to wish you and your families all a very Merry Christmas and best wishes for a prosperous 2007.

2006 has been a great year for new members and we have seen the membership base grow to over 120. We welcome the following new members who have joined in the last three months:

Summit Capital - Full

Finistere LLC - Full

Hanover Group – Institutional Investor

Alliance Bernstein - Institutional Investor

Forsyth Barr - Institutional Investor

Industry Funds Management (Melbourne) - Institutional Investor

NZ Funds - Institutional Investor

Anderson Creagh Lai - Associate

Howard & Co - Associate

Hesketh Henry – Associate

Capstone Partners – Associate

Grant Thornton (Auckland) – Associate

Igor Stychinsky – Angel

Pacific Channel – Angel

Martin Riegel - Individual

Mike Jenkins - Individual

John McDowell - Individual

Hamish Edwards - Individual

John Terry – Individual

We have set out the dates of our key 2007 events (including our networking events, the AGM and the 2007 NZVCA conference) in the attached document so that you can note them nice and early in your diaries! Specific details for each event will follow in the New Year.

Adding to Hamish's comments above, I would just like to thank the Association's members and sponsors for their support in 2006 and wish you all a happy and safe Xmas and New Year!

Chris Twiss
ex NZVCA