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An overview of the NZVIF's Halo Fund
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Halo No 1 Fund LimitedA presentation to investors
Halo No 1 Fund Limited
• This document has been prepared by Halo Investment Management
Limited (“HIM”) for information purposes only. No offer of securities is being
made by HIM pursuant to this document.
• While all reasonable care has been taken to ensure that the information in
this document is accurate, HIM will not be liable for any errors in that
information or for any reliance placed on information contained in this
document.
Disclaimer
Halo No 1 Fund | May 2009
Halo No 1 Fund Limited
• The Halo Fund No 1 provides a passive ‘fund’ approach to Angel investing.
• It gives investors a unique opportunity to gain qualified access in a cost
effective manner to a portfolio of over 30 New Zealand early-stage, high
growth investments.
• It does so by partnering with New Zealand’s most experienced Angel
investors to invest in new technology, high growth companies in high-value
sectors like software, bio-technology, niche manufacturing and medical
diagnostics.
• The Fund will be a passive investor which invests on a one-to-two basis in
deals vetted and approved by the co-investing partners and the New Zealand
Venture Investment Fund Limited’s (NZVIF) Seed Co-Investment Fund
(SCIF).
The Opportunity
Halo No 1 Fund | May 2009
Halo No 1 Fund Limited
• Halo Fund No 1 Limited is structured to qualify as a Portfolio Investment
Entity (PIE).
• A minimum of five million shares at an issue price of NZ$1.00 per Share,
with provision to issue up to a further five million Shares at NZ$1.00 per
Share in oversubscriptions are to be offered to “eligible persons” in terms of
the Securities Act 1978 pursuant to an Information Memorandum to be
distributed to “eligible persons” only.
• The minimum investment per investor will be 25,000 shares at NZ$1.00 per
share (NZ$25,000). An initial subscription of NZ$0.40 per Share
subscribed for is paid upon application.
• Further calls to be made over a five year period.
Key Terms of the Fund
Halo No 1 Fund | May 2009
Halo No 1 Fund Limited• The Fund is targeting a portfolio of 30 plus portfolio companies over the five year
Investment Period.
• The Fund will co-invest in Eligible Companies in which the SCIF also invests
alongside Co-Investors, on a 1:2 basis up to NZ$250,000 per company over a
number of rounds.
• The terms are attractive:
o An application fee of 1% over and above the capital committed will be charged.
o Establishment costs of 1% of the committed capital will be charged by the
Manager to the Fund.
o No on-going management or performance fees will be charged to Investors. The
Manager will charge a transaction fee for all investments of 4% of the amount
invested by the Fund at the time an investment is made.
o The Fund will be responsible for meeting all other expenses in relation to the
operation of the Fund.
Halo No 1 Fund | May 2009
Key Terms of the Fund
Halo No 1 Fund Limited
• The Fund is being brought to you by New Zealand’s leading early-stage
Angel investment groups:
o Upstart Angels, powerHouse Ventures, Venture Accelerator, Manawatu
Investment Group, Pacific Channel, ICE Angels, Sparkbox Investments,
Cure Kids Venture, New Zealand Diagnostics, New Zealand Venture
Investment Fund
• It is these active Co-Investors, comprising many of New Zealand’s leading
Angel investors, who will select, undertake due diligence on, invest in and,
ultimately, exit individual portfolio companies.
Halo No 1 Fund | May 2009
Key Terms of the Fund
Halo No 1 Fund Limited
• The Manager has outsourced key elements of the Fund:
o NZVIF Limited – The Manager has entered into a services contract with
NZVIF, who will provide all secretariat and investment management
functions for the Manager.
o Appello Services Limited – The Manager has entered into a services
contract with, a specialist registry provider, to provide all registry functions
for the Fund. Appello Services is 30% owned by NZX Limited.
o Angel Groups – The primary role of the individual Angel groups is to provide
the deal flow for the Fund. They are the active investors who identify, invest
in and directly manage the early-stage companies. In addition to this core
role they are responsible for managing the relationship relationships with all
investors in the Fund.
Professional Management
Halo No 1 Fund | May 2009
Halo No 1 Fund Limited• Angel investing can provide strong returns. Recent United States (US) data
suggests returns on group-affiliated Angel investments average to a 2.6x return on
investment after 3.5 years (27% IRR).
• However Angel investing is high risk as a significant portion of early-stage
investments do not survive.
• A portfolio approach is key to driving returns in Angel Investing. The Funds Portfolio
which be over 30 companies.
The Returns
Returns
More than 10x 7%
5-10x 6%
1x-5x 32%
Negative IRR 52%
Halo No 1 Fund | May 2009
Source: Kauffman Foundation
Halo No 1 Fund Limited
• To kick-start the Fund, it is negotiating to purchase a 25% interest in the
SCIF’s portfolio of investee companies. This purchase will ensure investors
are able to access an established portfolio of New Zealand early-stage
companies from day one of their investment. Examples include:
o Go Vertical Medical developing and commercialising
e-learning systems for clinical procedures.
o Xenos has developed technology for aseptic (sterile) bottling of long-life
beverages. The company’s technology allows flexible packaging of long life
drinks in glass or plastic.
o Mesynthes have developed and patented a tissue sheet medical device
which can be used for wound care and surgery.
What Will be Invested In
Halo No 1 Fund | May 2009
Halo No 1 Fund Limited• The Board of the Fund is responsible for appointing the Manager and monitoring
the Manager’s performance
• The Directors have been selected based on their commercial and early-stage
investment experience.
o John McDonald Chairman – Over 30 years experience in non executive and management
positions. Director of ICE Angels, Air New Zealand Limited and Chairman of Pohutukawa
Private Equity Limited.
o Phil Holliday Director - Entrepreneur and investor with over 35 years in the ICT and
broader technology industries. Chairman of powerHouse Ventures.
o Dr Norman Evans Director - CEO of Upstart, Director of Dunedin City Holdings Limited,
and City Forests Limited.
o Andrew Duff Director - A solicitor and chartered accountant. Chairman of Sparkbox
Limited and 2 Ignite Limited.
o Franceska Banga Director - Chief Executive of NZVIF Limited since 2001. Chair of the
NZVCA, member of the Capital Markets Task Force.
The Key People
Halo No 1 Fund | May 2009
Halo No 1 Fund Limited
• The Fund presents a unique opportunity to gain qualified access in a cost
effective manner to a portfolio of New Zealand early-stage, high growth
investments.
• Investors will gain immediate exposure to a portfolio of around 20 early-stage
companies.
• Company selection is crucial to successful Angel investing. The Fund will be
partnering with New Zealand’s most experienced Angel investors to invest in
new technology, high growth companies in dynamic, high-value sectors like
software, bio-technology, and medical diagnostics.
• All investments made by the Fund will follow a structured process and will rely
on the relevant active Co-investor to undertake due diligence on the portfolio
company and negotiate and lead the negotiation of commercial terms.
Conclusion and Next Steps
Halo No 1 Fund | May 2009
Halo No 1 Fund Limited
• The minimum target size of the Fund is NZ$5 million.
• The minimum subscription is NZ$25,000 with a minimum of NZ$10,000 due
on application.
o Offer opens: 18 May 2009
o Offer closes: 30 August 2009
• If you are an “eligible person” in terms of the Securities Act 1978, you may
request an Information Memorandum.
Conclusion and Next Steps
Halo No 1 Fund | May 2009
Contact Details• To invest in the Fund you must be an affiliate of one of the participating Angel
groups who will be able to provide you with the Funds Information Memorandum.
• Please contact [email protected] for more information.
Conclusion and Next Steps
Halo No 1 Fund | May 2009
www.halofund.co.nz