Latest / Best of Business / Matt Goodson: Salt Funds managing director on the increased overseas interest in NZ companies

Transcript

Matt Goodson: Salt Funds managing director on the increased overseas interest in NZ companies · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks Be follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Now, we've apparently never had more overseas interest in buying
• 0:19
  Speaker 2: New Zealand businesses. A survey of foreign investors by Simpson
• 0:23
  Speaker 2: Grierson has found that forty nine percent of them are
• 0:25
  Speaker 2: considering investing in New Zealand next year. That's up from
• 0:27
  Speaker 2: forty percent last year. Not much of a surprise considering
• 0:30
  Speaker 2: we've seen about fifty takeover deals in the last year,
• 0:33
  Speaker 2: including our Vida Sparks, data Center, business and event Finder.
• 0:36
  Speaker 2: Matt Goodson is Salt Funds Management's managing directory and he's
• 0:39
  Speaker 2: with us. Hey Matt, evening, he why are our businesses
• 0:42
  Speaker 2: so popular overseas?
• 0:45
  Speaker 3: I think it's probably not too different to normal. Now.
• 0:48
  Speaker 3: We've seen a lot of takeovers on the insie X,
• 0:50
  Speaker 3: but some of them them have been local and as
• 0:53
  Speaker 3: you say, some of them have gone to offshore.
• 0:55
  Speaker 2: And so it does seem like it's slightly high at
• 0:58
  Speaker 2: the moment, does it not. I mean, apparently we have
• 0:59
  Speaker 2: we have had extra interest at the moment.
• 1:03
  Speaker 3: Yeah. Now, we've certainly lost quite a few companies, especially
• 1:06
  Speaker 3: at the small range I think the tough economy has
• 1:10
  Speaker 3: weighed on valuations there and it's hard yards if you're
• 1:14
  Speaker 3: not a big company, and in the indices that the
• 1:17
  Speaker 3: passive funds have to buy. So it's possibly made a
• 1:20
  Speaker 3: few of those smaller companies a bit vulnerable. And that's
• 1:25
  Speaker 3: what happens all the time. But the burial warriors, there
• 1:27
  Speaker 3: haven't been any new ones list. No. Normally you lose
• 1:29
  Speaker 3: some and then you gain some more. But we just
• 1:31
  Speaker 3: haven't been seen the new ones.
• 1:33
  Speaker 2: Why not?
• 1:35
  Speaker 3: State of the economy. I think it's a global thing
• 1:39
  Speaker 3: as well. A lot of private equity companies are holding
• 1:41
  Speaker 3: on to firms that they would have exited by now.
• 1:44
  Speaker 3: And also the fixed costs have been listed just keep
• 1:47
  Speaker 3: creeping up, the compliance costs, the clart carbon disclosure requirements,
• 1:53
  Speaker 3: et cetera, et cetera. And you know, the typical size
• 1:56
  Speaker 3: for a Kiwi firm being a small economy is a
• 1:58
  Speaker 3: bit smaller. So those fixed costs can really weigh on
• 2:01
  Speaker 3: people who are considering it.
• 2:02
  Speaker 2: Is this a case of them needing to send David
• 2:04
  Speaker 2: Seymour and his team in to cut some red tape.
• 2:08
  Speaker 3: I wouldn't do any harm. A better economy would also
• 2:12
  Speaker 3: help yeah, and so look, you know, hopefully in the
• 2:15
  Speaker 3: next twelve to eighteen months we will see some new listings,
• 2:19
  Speaker 3: but right now, at this minute, there aren't too many
• 2:22
  Speaker 3: that I'm aware of. In the woodwork.
• 2:24
  Speaker 2: Is part of the reason that the international buyers are interested,
• 2:27
  Speaker 2: because our businesses are actually presenting is quite a bargain
• 2:30
  Speaker 2: at the minute.
• 2:33
  Speaker 3: It's some are some aren't. If you look at equity
• 2:37
  Speaker 3: markets all around the world, what you see is the
• 2:40
  Speaker 3: largest companies are really high valuations by and large at
• 2:44
  Speaker 3: the moment, but a lot of smaller companies have been
• 2:46
  Speaker 3: left behind, so S and P and the US all
• 2:49
  Speaker 3: time record, but the average company is trading a perfectly
• 2:53
  Speaker 3: bang on its average evaluation. You've seen that about here
• 2:57
  Speaker 3: as well, So you know, I think it's just a
• 2:59
  Speaker 3: case of where people can see an opportune target, whereas
• 3:05
  Speaker 3: some synergies I've been making.
• 3:07
  Speaker 2: A move now event find it. When we spoke to
• 3:09
  Speaker 2: them earlier about the sales to ticket Tek, they said
• 3:11
  Speaker 2: in order to be able to upsize and go global,
• 3:14
  Speaker 2: they would need the likes of Ticketek to take them there.
• 3:16
  Speaker 2: Why can't they do it themselves?
• 3:21
  Speaker 3: Kiwi companies, I've had a long struggle going global many
• 3:24
  Speaker 3: have tried, not many have succeeded. Capital base, You're up
• 3:30
  Speaker 3: against very deep, deep pocketed competitors, often oversays, unless what
• 3:34
  Speaker 3: you're doing has a real edge. So know, the likes
• 3:37
  Speaker 3: of zero have succeeded, although chiefly in Australia and still
• 3:44
  Speaker 3: really struggling in the US. But you know a lot
• 3:47
  Speaker 3: of companies have tried and failed, or you really need
• 3:50
  Speaker 3: a technical edge like Fisher and Pipal Healthcare of course,
• 3:53
  Speaker 3: which is probably our poster child. Matt.
• 3:55
  Speaker 2: It's good to talk to you. Thank you so much,
• 3:57
  Speaker 2: Matt Goodson, Salt Funds Management, Managing Director.
• 4:00
  Speaker 1: For more from News Talks B listen live on air
• 4:03
  Speaker 1: or online, and keep our shows with you wherever you
• 4:06
  Speaker 1: go with our podcasts on IR on radio