MMS #25 | WTF is Private Capital? What it means and why it's great for investors

06/17/24 • 17 min

In this episode of Money Made Simple, Liv is joined by Simplicity's (quietly) kick-ass Head of Private Capital, Matt Houtman, to delve into the intriguing but sometimes confusing world of Private Equity and Venture Capital. Get ready to understand why a KiwiSaver and Investment Fund manager would invest in private companies (rather than just the share market), and how it specifically benefits investors. This week's episode covers:

Matt's journey from investment banking, to raising $500 million in funds, to joining the Simplicity team
The key differences between private and public investments
What jargon such as private capital, private equity, and venture capital ACTUALLY mean
Simplicity's strategies and criteria around this type of investing
A look at the relative size of our private capital - and the outsized returns-to-date
The long-term benefits of private capital investments for investors
Insights into how Simplicity balances fundamentally passive investment strategies with more active private capital investments

Resources we mention in this episode
- Simplicity's Responsible Investment Policy
- Venture capital via Icehouse Ventures
- Private equity businesses Simplicity invests in

By the end of this episode, you'll have a clear understanding of how private capital investments work, and why they are an exciting and beneficial addition to an otherwise predominantly passive portfolio. You'll discover how these investments drive exciting potential returns for members while supporting NZ's economic growth. Win-win!

---
Please help us share the good word (and make Kiwis richer and smarter with money) - the more we grow, the more good we can do %) Don't forget to follow, subscribe and rate the podcast if you found it useful!
Find us:
Instagram
Facebook
LinkedIn
Disclaimer: This podcast contains personal opinions and is intended to provide educational information only. It doesn't relate to your particular financial situation or goals and is not financial advice or recommendations. Simplicity New Zealand Limited is the issuer of the Simplicity KiwiSaver scheme and investment funds. For product disclosure statements please visit Simplicity's website simplicity. kiwi.

Matt's journey from investment banking, to raising $500 million in funds, to joining the Simplicity team
The key differences between private and public investments
What jargon such as private capital, private equity, and venture capital ACTUALLY mean
Simplicity's strategies and criteria around this type of investing
A look at the relative size of our private capital - and the outsized returns-to-date
The long-term benefits of private capital investments for investors
Insights into how Simplicity balances fundamentally passive investment strategies with more active private capital investments

Resources we mention in this episode
- Simplicity's Responsible Investment Policy
- Venture capital via Icehouse Ventures
- Private equity businesses Simplicity invests in

Previous Episode

MMS #24 | I'm breaking up with you: Opting out and withdrawing early from KiwiSaver

In this episode of Money Made Simple, Jennie welcomes Liv back after a bit of a hiatus (all is explained!) to chat about what is a highly searched, but often misunderstood topic: Opting out of KiwiSaver, as well as making early withdrawals. We explain how and why someone might choose to opt out once they're automatically enrolled, and the (several) reasons you can take some or all your KiwiSaver funds out before you retire.
This week's episode covers:

The voluntary nature of KiwiSaver, and how people can join (either by choice or automatic enrollment)
The reasons (good and bad!) people would choose to opt out of KiwiSaver, once already enrolled
What exactly happens in the process of opting out - the steps you take
The substantial impacts that opting out of KiwiSaver could have (hint: you'll lose out on some free money!)
Why and how you can withdraw some of all of your KiwiSaver funds early, including for your first home or for financial hardship
The financial consequences of of making early withdrawals
KiwiSaver savings suspensions - the what, why and how it could be a better option than opting out or withdrawing your savings

Resources we mention in this episode:
IRD website Opting out of KiwiSaver
IRD website Getting my KiwiSaver savings early
MMS episode 6 KiwiSaver contribution types
By the end of this episode, you should have a clear idea of the reasons but also the impacts of not having your money invested in KiwiSaver. This way you can hopefully make more informed decisions on the best plan of action for you, should your investing journey need to change course!

Next Episode

MMS #26 | The Rainy Day Fund, your financial umbrella for life's nasty little surprises

In this episode of Money Made Simple, join Liv and Jennie as they dive into the essentials of setting up a rainy day AKA an emergency fund. With the current economic climate bringing uncertainty for many of us, having a financial safety net is more crucial than ever. This episode covers:

What a rainy day fund is and why it's critical for our financial security
Practical steps about how to get started, including how to determine how much you need in your emergency fund
Tips for setting up and managing your fund to keep it accessible yet secure
Insights on adjusting your fund over time to adjust to life changes
And a few thoughts about ways to get your emergency fund working harder for you, while there is no emergency

Resources we mention in this episode:
- The Barefoot Investor
- Money Made Simple book by Sam Stubbs
- Sorted.org savings calculator

By the end of this episode, you'll understand the importance of an emergency fund, how to calculate your needs based on your lifestyle, and smart strategies for growing and maintaining your fund over time. Tune in to gain the knowledge and confidence to build a financial buffer that ensures peace of mind and preparedness for any unexpected expenses.