New Zealand Engineering 1999 September

Ventures

No.8 Venture Fund Launched

Morel and Co has launched the No.8 Venture Fund with an initial capital base of $20.5 million. General partner running the fund is Peter Allport, formerly of Goodman Ventures. The fund has an advisory board of three: Neville Jordan; Dennis Chapman and Hugh Fletcher. The fund has drawn its funding from high net worth individuals and investment companies.

Stephen McPhail, senior analyst with Morel and Co, says the need for the fund was identified 12-18 months ago as the investment bank became aware of the need for a true venture capital fund. Problems in establishing the fund included identifying individuals with the expertise to make the venture industry work. The fund aims to take companies through to full initial public offering stage on markets such as the Nasdaq. Not all will make it that far but that is an aim.

The company’s first investment is in Tacit, a software firm which has developed applications for the Life Office industry. The company has already gained sales in New Zealand and Australia, and is already gaining attention in the United States.

Mr McPhail says while other parts of the economy may be weak the technology sector is “hot”.

Caltech Partners with AMP

Caltech Capital Partners has signed a management contract with AMP Asset Management to manage direct investments in companies on a high growth phase turning over more than $15 million a year. The aim is to grow these companies to around the $50 million mark and prepare them for public offering. Caltech chief executive, Wendie Hall, says the company is focused on technology based companies. Caltech itself can take on ventures of a smaller size with a higher risk/reward profile.

Other funds being explored

Canterbury Development Corporation and Auckland University’s commercial arm UniServices Ltd are both in the process of exploring options to establish venture funds. Neither organisation was prepared to say whether or not they had enough support to establish a fund as this publication went to press, but both were hopeful that this would change in the near future. Dr John Kernohan of UniServices says any fund would almost certainly involve offshore expertise because there is not enough expertise available in this country. He says UniServices has been involved in the establishment of two companies: EPTCO and Physiome Sciences (see the interview with Peter Hunter) and it has another six or seven firms in mind.