Originally Posted by
cycat64
To get involved with a Private Equity Fund usually requires a fair amount of money. In the case of Hauraki No.2 the minimum contribution from memory was $20,000 but in the case of a later one I am aware it was in the region of $500,000 and for 'selected' clients only. It is an area of high risk and patience. In the case of Hauraki No.2 we are halfway to the wind-up deadline of 10 years. Prior to Hauraki No.2 the Hauraki No.1 fund was wound up after about 6 years and returned an impressive result to investors. A typical fund will take on about 4 - 10 investments. The attrition rate is high and on average about 20% of investments go down the gurgler, but it often requires only one to perform well and you get the money back. This was the case with Norfolk and the No.2 fund. There are lots of funds about, especially Australian ones, but in NZ the Direct Capital and Pohutukawa funds have done well (the new Maui Capital group may also be worth following). When committing money to these funds you have to be prepared to lose the lot, but you are also gaining access to the talents of the 'get rich quick' boys. These people are generally multi-millionaires who have come up through the investment banks and who move ruthlessly and single-mindedly to maximise their investments. Their ambition and greed becomes your gain or your loss. These people are far too talented to limit themselves to mundane jobs such as executives in the big name companies and prefer the thrill of the chase. Placebo asks how I feel about the 'family silver' ie. Kathmandu, being flogged off. Well, I feel real good, because I might just get that part of my money back and maybe some more to boot. The intention when Kathmandu was bought was to add value to it and then screw the investing public off in an IPO within a medium time frame (a la Guiness Peat). It may be a case of 'buyer beware' but as one of the sellers I have no qualms or regrets about it. Meanwhile, can I interest you in a retirement apartment ?