8/09/2023·2 mins to read
Expanding Horizons: Global uncertainty leads investors to short-term M&A opportunities in New Zealand in 2024
We’re pleased to release our fifth M&A report surveying offshore investors’ attitudes towards New Zealand.
This year’s Report, Expanding Horizons 2023: Offshore perspectives on investment into New Zealand, reveals mixed views of opportunism, market volatility and a preference towards investment in the short term as global macroeconomic uncertainties and our own upcoming election loom large.
Our survey canvassed 90 international investors, and the Report shows New Zealand is still viewed as an attractive, settled and stable investment destination and a regional standout - but some of the shine of recent years has worn off.
Simpson Grierson Corporate Partner, James Hawes says: “Offshore appetites for investing in Aotearoa appear to be a mixed bag this year.
“On the one hand, investors are absolutely still seeing opportunities in New Zealand. On the other hand, it’s volatile and there’s a skew towards short-termism. That’s to be expected in this environment.
“There is definitely some capital that investors say they are looking to deploy in the next 12 months, possibly to support existing operations with post-Covid expansion, however fewer will commit to considering investments in the longer term,” says James.
Key findings from the 2023 report include:
- A 51% increase from 2022 in the number of investors showing near term appetite for New Zealand with close to half of investors surveyed (44%) saying they are planning to invest in New Zealand within the next 12 months
- Far fewer respondents say they are considering investments in the medium to longer term, at only 29%, compared with 54% last year
- 14% say they wouldn’t consider NZ as an investment destination, up from 0% last year
- New Zealand was ranked as the top market in Asia Pacific out of nine countries when it comes to ease of doing business and the quality of investment opportunities, with 49% saying New Zealand’s positive economic outlook, relative to other markets, is the key reason to invest
- This year we see a sharp drop in positive sentiment of respondents viewing New Zealand’s government policies as very or moderately supportive of foreign investment; from 78% in 2022 to 42% this year
- While 31% say they will likely increase investment into New Zealand if there is a change in government, the majority say any change will have no impact on their investment intention
- 87% say that Environmental, Social and Governance (ESG) factors are important to their M&A investment decision making
- When asked to select the three most attractive sectors, investors prioritised Consumer (54%) and Technology, Media & Telecommunications (50%). Meanwhile, renewable energy as an investment sector is a notable new focus area, with 32% of investors deeming it attractive.