NEW ZEALAND Trends and Developments Contributed by: Josh Cairns, Dominic Toomey, Stuart Evans and Matt Mazenier, Simpson Grierson
Infrastructure as a growth sector New Zealand faces a widely acknowledged infrastruc - ture investment deficit across almost all categories of infrastructure, with government-led and private sec - tor analyses pointing to a multi-decade pipeline of required capital investment. This has already begun to attract the attention of not only domestic asset man - agers, but also large offshore asset managers with dedicated Australasian or global infrastructure credit funds. Such lenders are increasingly active on Austral - ian infrastructure financing transactions and we would expect them to further explore similar opportunities in New Zealand as the policy environment evolves and investment pathways become clearer. Given the scale of capital required, infrastructure is one asset class where deal sizes align well with off - shore managers’ investment mandates. This is likely to drive increased private credit participation in infra - structure-related financings as further opportunities arise in the New Zealand market. Influx of investment into domestic credit funds Another driver of the recent momentum in the growth of domestic credit funds in New Zealand has been the influx of capital into domestic funds from foreign investors. A major catalyst for this, alongside tradi - tional wholesale sources, has been the Active Inves - tor Plus (AIP) visa scheme, introduced in April 2025. The scheme encourages high net worth individuals to invest in New Zealand’s innovation and growth sectors by allocating capital into managed funds and other approved investments. Managed funds in New Zealand, and private credit funds in particular, have been significant beneficiaries of this programme. The effect of this new investment has been twofold. • Increased availability of capital – the inflow of capital to domestic private credit funds has given fund managers greater capacity to scale up assets under management, as well as pursue larger man - dates in the process. • Stronger investment mandates – given the AIP investment rules require capital invested into man - aged funds to remain invested for a three-year period, asset managers have a strong mandate from investors to compete for financing mandates
and deploy the capital that has been invested in order to deliver tangible returns within that time - frame. This creates an emerging dynamic where those private credit managers who are receiving increased capital inflows face pressure to maintain deployment rates to satisfy investor appetite. Such pressure will drive competition between asset managers for deal flow, but the broader effect is positive: despite its limited market share relative to the incumbent banks, private credit is increasingly becoming a more recognisable and strategically important component of the domes - tic finance market. Organic growth of domestic funds New Zealand’s private credit market is notable for the organic manner in which domestic asset manag - ers have been required to build their loan books, in the absence of opportunities to acquire established portfolios. This has resulted in a market characterised by incremental, relationship-driven origination rather than scale achieved through book purchases. Not - withstanding periods of adverse publicity affecting the broader investment landscape (most prominently the widely publicised collapse of Solar Zero and Black - Rock’s winding-up of its much-heralded NZD2 billion climate fund) New Zealand’s domestic credit funds have continued to expand their portfolios materially. This sustained growth underscores the depth of inves - tor support for the asset class and the resilience of domestic private credit platforms as they continue to mature. Loan Structures and Financing Models The structure of private credit facilities in New Zealand reflects both the realities of a smaller market and the opportunistic approach taken by private credit lenders aiming to build market share. Bilateral secured lending as the norm Although some private credit funds acquire participa - tions in syndicated facilities on the secondary market, the majority of private credit transactions in New Zea - land are structured as secured bilateral loans, typically provided to mid-market borrowers across a range of sectors. These transactions usually take the form of:
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