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Kiwi expats a mine of untapped potential

What's to be done about the decline in foreign investment into New Zealand? Well, we could start close to home: Kiwi expats are an untapped source of potential investment, non-profit organisation Kea New Zealand has found.

What's to be done about the decline in foreign investment into New Zealand? Well, we could start close to home: Kiwi expats are an untapped source of potential investment, non-profit organisation Kea New Zealand has found.

Kea, a network for New Zealanders abroad, surveyed more than 500 expats and found many were willing to commit both time and money to the cause of New Zealand business. At least 15 percent are strongly motivated to invest in New Zealand companies, and almost three-quarters (72.8 percent) say they would be willing to help mentor or manage a New Zealand small to medium enterprise.

Stephen Tindall “Most New Zealanders see economic growth as our best chance of achieving improved prosperity, but growth requires capital and connections,” said Kea cofounder Sir Stephen Tindall.

While personal experience suggested more and more of this money will come from Asia, he said, high net worth Kiwi expats represented significant untapped potential.

“These findings prove there is a great opportunity for New Zealand’s public and private sectors to mobilise the Kiwi expat investment force. The study confirms the vital role that Kea New Zealand can play globally by helping connect these groups in an engaging and effective way.”

Tindall said it was therefore time to better communicate New Zealand'a value proposition and promote it as an investment destination to expats, and build stronger links between high net worth expats and New Zealand fund managers.

"This sector is going great guns at the moment,” he said.

“If there is one sector that's growing right now it's the angel area.”

He said based on responses from UK expats, there were potentially “very large amounts of money” for the right projects.

Those surveyed generally agreed New Zealand had a strong innovation base, but said businesses tended to lack commercial maturity and savvy.

Tindall said that perception needed to be addressed.

“The level of commercial skill is actually very good,” he said. "There is some depth of New Zealand acumen.”

Kea research identified two types of prospective investors most likely to invest in New Zealand, defined by their commercial know-how and their ‘Kiwi orientation’ – or the level of extra leeway the investor will allow for New Zealand investments.

All in all, the study divided investors into four roughly equal quadrants:

* Commercial investors (hardnosed experienced investors likely to earn $200,000-plus)

* Active NZ investors (similarly experienced high earners, likely to have lived away from New Zealand for more than 10 years, but eager to engage with their homeland)

* Aspirational NZ investors (investors with lower incomes, more business experience than investment experience, less likely to return to New Zealand)

* Aspirational investors (investors with lower incomes and no specific interest in New Zealand).

Of those, the report said the Active NZ investor was the “most eager and credible” sector to target for future investment in New Zealand.

NZTE acting general manager of capital Richard Laverty said the report confirmed “many things we understood anecdotally about the investment potential of New Zealand’s diaspora”.

The report was funded by Auckland Tourism, Events & Economic Development and BNZ.