Question 1

What is private equity?

Accepted Answer

Private equity is a form of investment where firms acquire ownership stakes in private companies — businesses that are not listed on the stock exchange. Unlike public market investors who buy and sell shares, PE firms take a hands-on approach, working directly with the businesses they invest in to improve operations, grow revenue, and build long-term value. It is one of the most established models for business growth and succession globally.

Question 2

How does private equity work in New Zealand?

Accepted Answer

New Zealand has a growing but still relatively small private equity market compared to Australia, the US, or the UK. This means there are significant opportunities for well-positioned firms to acquire quality businesses that larger international PE firms overlook. Many New Zealand business owners are approaching retirement age, creating a wave of succession opportunities in essential service sectors.

Question 3

What types of businesses do private equity firms buy in NZ?

Accepted Answer

PE firms in New Zealand acquire businesses across many sectors, but the most resilient investments tend to be in essential services — trades, compliance, and infrastructure. These businesses provide services that are legally required, physically necessary, and cannot be automated away. Think fire protection, electrical contracting, elevator maintenance, and building services.

Question 4

How is a business valued for acquisition?

Accepted Answer

Business valuation typically centres on a multiple of EBITDA (earnings before interest, tax, depreciation, and amortisation), adjusted for factors like revenue quality, customer concentration, team stability, growth potential, and asset base. The specific multiple depends on the industry, size, and risk profile of the business. Recurring revenue streams and long-term contracts tend to support higher valuations.

Question 5

What makes Kauri Partners different from other PE firms?

Accepted Answer

We take a long-term hold approach rather than the typical 3-5 year buy-and-sell model. We enhance businesses with technology — modern operations platforms, AI-powered analytics, and automated workflows — while retaining the teams and culture that made them successful. We focus exclusively on essential services in New Zealand, giving us deep sector knowledge and a genuine commitment to the businesses and communities we invest in.

Private Equity in New Zealand: Frequently Asked Questions

What is private equity?

How does private equity work in New Zealand?

What types of businesses do private equity firms buy in NZ?

How is a business valued for acquisition?

What makes Kauri Partners different from other PE firms?

Considering Private Equity for Your Business?