Matt Goodson: Salt Funds managing director on the increased overseas interest in NZ companies

According to new reports, overseas interest in NZ-based companies is at a record high.

A new survey by Simpson Grierson says 49 percent of international respondents considering moving more money into New Zealand, compared with 40 percent last year.

Salt Funds managing director Matt Goodson explains what's driving this change.

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Episode Transcript

Speaker 1 (00:00):
Now we've apparently never had more overseas interest in buying
New Zealand businesses. A survey of foreign investors by Simpson
Grierson has found that forty nine percent of them are
considering investing in New Zealand next year. That's up from
forty percent last year. Not much of a surprise considering
we've seen about fifty takeover deals in the last year,
including our Vida Sparks, data Center, business and event Finder.
Matt Goodson is Sault Funds Managements Managing Directory. He is

(00:22):
with us. Hey, Matt, evening, why are our businesses so
popular overseas?

Speaker 2 (00:29):
I think it's probably not too different to normal. Now
we've seen a lot of takeovers on the insie X,
but some of them them have been local and as
you say, some of them have gone to offshore.

Speaker 1 (00:39):
And so it does seem like it's slightly high at
the moment, does it not. I mean, apparently we have
we have had extra interest at the moment.

Speaker 2 (00:46):
Yeah. Now we've certainly lost quite a few companies, especially
at the small runes. I think the tough economy has
weighed on valuations there and it's hard yards if you're
not a big company in the says that the passive
funds have to buy. So it's possibly made a few
of those smaller companies a bit vulnerable. And that's what

(01:08):
happens all the time. But the bur real Warriors, there
haven't been any new ones list. No. Normally you lose
some and then you gain some more. Yeah, but we
just haven't been seen the new ones.

Speaker 1 (01:16):
Why not.

Speaker 2 (01:19):
State of the economy. I think it's a global thing
as well. A lot of private equity companies are holding
on to firms that they would have exited by now.
And also the fixed costs have been listed just keep
creeping up, the compliance costs, the cut carbon disclosure requirements,
et cetera, et cetera. And you know, the typical size

(01:40):
for a KIEWE firm, being a small economy, is a
bit smaller. So those fixed costs can really weigh on
people who are considering it.

Speaker 1 (01:46):
Is this a case of them needing to send David
Seymour and his team in to cut some red tape.

Speaker 2 (01:52):
I wouldn't do any harm a better economy. It would
also help. Yeah, And so look, you know, hopefully in
the next twelve to eighteen months we will see some
new listings. But right now at this minute, there aren't
too many that I'm aware of. In the woodwork.

Speaker 1 (02:08):
Is part of the reason that the international buyers are interested,
because our businesses are actually presenting is quite a bargain
at the minute.

Speaker 2 (02:16):
It's some are some aren't. If you look at equity
markets all around the world, what you see is the
largest companies are really high valuations by and large at
the moment, but a lot of smaller companies have been
left behind, so S and P and the US all
time record, but the average company is trading a perfectly

(02:37):
bang on its average evaluation. You've seen that abit here
as well, so you know. I think it's just a
case of where people can see an opportunity target, whereas
some synergies something making a move.

Speaker 1 (02:51):
Now event find it. When we spoke to them earlier
about the sales to ticket Tek, they said, in order
to be able to upsize and go global, they would
need the likes of Ticketek to take them there. Why
can't they do it themselves?

Speaker 2 (03:04):
Kiwi companies have had a long struggle going global. Many
have tried, not many have succeeded. Capital base, you're up
against big, deep, deep pocketed competitors often overseas unless what
you're doing has a real edge, so never likes of
zero have succeeded, although chiefly in Australia and still really

(03:28):
struggling in the US, but you know a lot of
companies have tried and failed, or you really need a
technical edge like Fisher and Pipal Healthcare of course, which
is probably our poster child. Matt.

Speaker 1 (03:39):
It's good to talk to you. Thank you so much,
Matt Goodson, Salt Funds Management Managing Director.

Speaker 2 (03:44):
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Speaker 1 (03:47):
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