Altered Capital: Investing in Kiwi Growth to Save Ourselves from Mediocrity

28 November 2023

McGregor Fea is a founding partner at Altered Capital, a venture capital and growth investment firm and sponsor of the 2023 TIN Report.

Let’s invest in Kiwi growth to save ourselves from mediocrity.


We’ve been lucky in New Zealand. Until recently, investors here have experienced consistent and substantial wealth improvement. And the greatest part? Our asset price growth was keeping up with the best in the world. For many of us, this was also particularly satisfying because we were “sticking to our knitting”. Why bother following what’s been happening in offshore markets when we’ve done nearly as well investing at home?

The answer is that investment has been concentrated across stable, low-yielding asset classes, which benefit from falling interest rates disproportionately. Good old fashioned multiple expansion over the last ten years meant that, in the face of low earnings growth, housing went up, farmland went up, and industrials, utilities, and real estate (the core of the NZX50) went up too. And although all sectors benefitted from low interest rates, New Zealand’s outsized exposure to ‘stable’ sectors with the largest multiple increases disguised how relatively little we were investing in growth.

Now, that paradigm has changed. With interest rates up and not looking like they’ll head back to near-zero, traditional New Zealand investors risk being stuck in an enduring period of poor returns. Without the tailwind of low interest rates, if the next ten years follow the last ten of low-to-no earnings growth in our traditional sectors, we should expect low-to-no capital growth too. In a world of flat multiples, the only way to win is to grow.

TIN highlights the shining beacon of growth that is our technology sector, with the TIN200 contributing more to our national exports than tourism in 2023 (and second only in total contribution to dairy). This sector, and the people within it, serve as inspiration for what some Kiwis are capable of when we back them. Their success is good for all of us. It’s a positive-sum game. Let’s ensure they have the resources they need to unlock their full potential.

How do we do that? Altered Capital is a venture capital and growth investment firm seeking to play its part in solving the problems of access to capital, support, and international experts. But we believe that investment in innovation, no matter where it comes from, benefits all players in our ecosystem. We have seen that the more chances taken, the more expertise develops. And that expertise begets success. And success inspires taking chances.

At the launch event of the 2023 TIN Report, Hon Judith Collins, now Minister for Technology, hit the nail on the head: to succeed “New Zealand needs to be a nation of scale-ups”. We agree. New Zealand may be a relatively low-wage economy but it’s nice to live here. If we give our brightest creators access to the benefits of capital growth, then we can be one of the most attractive places in the world for talent – offering financial as well as lifestyle benefits. That is great news for investors. So, let’s invest in Kiwi growth to save ourselves from mediocrity.


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