Syndex CEO Ross Verry gives his view on how New Zealand can emerge from the Covid-19 crisis.
As the gates of lockdown open onto a changed landscape it's time to take stock; to look at what we have, where our strengths lie and where the opportunities are.
There has to be a silver lining and, with the right innovation and systems in place, New Zealand could emerge shining brightly.
Having worked for both the industry and the financial systems that support it, in times of peaks and troughs, I can say that as we stand on the start line of the race ahead, we have to remember New Zealand is a world class producer of food – leaders in quality, productivity and efficiency.
We have a population of less than 5 million yet we produce enough to feed many more. Our supply is important to the world. Our kiwifruit, cherries and hops are revered and exported at premium prices and, although these items may fall into the luxury category, we excel in staple goods too.
Dairy, red meat and other horticulture sectors, such as the apple industry, which has enjoyed resurgence over recent years are among those goods – and, to quote MyFarm: "We feed millions of people overseas with safe, high-quality wholefoods and our agri-food sector continues to play a vital role in earning valuable overseas currency to pay for the imported goods we need."
If New Zealand is to lean on this industry to lead us out of this recession, we begin from a point of strength.
Food is an important product - we all need to eat. Europe has seen a 100 per cent increase in sales of fresh fruit and vegetables since Covid-19 and natural health foods, such as manuka honey, have seen a rush of demand. This downturn is unique in that it's reminding us about the importance of our health (and hopefully about our environment).
On the other side of the farm gate, opportunities will be sought and also land at the feet of the food providers too This is their time to embrace the sector's confidence and take on bigger thinking.
Changes made now in this (and many) sectors across the value chain – investment in R&D, focus on environmental sustainability – could shape the way we do things for decades to come. There is an opportunity for private New Zealand businesses to find solutions for key problems and behaviours.
This doesn't ignore the challenges these times will present. Many businesses will need new capital to fund growth, to strengthen balance sheets and replace bank debt (especially when banks have less funding allocated to agriculture) as well as facilitate succession planning and ownership transition as business owners get older.
We also have to take into account capital required for regulatory compliance, environmental best practice, R&D and market development.
Historically, matching private, particularly primary sector, businesses with investors has been challenging. Notwithstanding that, alternative assets as an investment class has been growing at 15 per cent per annum (compounding) since 2008. Investors recognise that this class (which includes land and other long term primary sector investments) offers access to income and capital growth through the economic cycle and provides a hedge against inflation.
Syndex*, a platform providing infrastructure for participants in private markets, has been addressing this problem since 2015 and is well positioned to support the critical SME sector through and beyond this difficult period in the economic cycle.
Syndex has brought its own innovation to the market; as the world order shifts, this platform is attuned – poised to support the building and rebuilding of communities.
Over 200 private companies, funds or partnerships use Syndex to connect and communicate with investors, offering transparency, performance data and liquidity. It is a destination for investors to find opportunities and confidently invest in the heart of our economy - the private businesses which are so important.
Specifically, investors can be connected to opportunities to invest proportionally on a platform that keeps them well informed, as well as offering the benefits of efficient portfolio management and access to liquidity.
Private issuers and asset managers can access capital and are then supported with digital solutions for registry management, administration, compliance and investor relations. This is a platform to support growth and cut costs using efficiencies Syndex has developed.
Syndex is proud to support the innovation and ingenuity of our nation. Bringing people together to enable the growth of a business is part of our community promise. We work hard to assemble a database of investors ready to give financial support, as well as, in some cases, bring their own talent and expertise.
We look forward to seeing how our nation uses the upcoming challenges to bring a better future. The skill, capability and innovation will, in months and years to come, shine from the screens of our marketplace and we look forward to supporting their story.
*Syndex has over 7000 investors on the platform already invested in private markets. In the 2019/2020 year, Syndex hosted 14 independent capital raises introducing over $30m into the private markets. Assets under administration now exceed $2.8b across over 200 issuing vehicles; investors have been strategically using Syndex's secondary market to either access investments or cash when they need to.
For more information on services provided by Syndex go to: www.syndex.exchange