Bayleys may list

Bayleys managing director Mike Bayley. Photo / Supplied

Bayleys could become New Zealand's first publicly listed real estate agency following a deal with private equity firm Direct Capital.

The Direct Capital IV fund has taken a 32 per cent stake in the family-owned company, with the aim of significantly expanding the agency.

The fund raised $325 million last year including a cornerstone investment from the New Zealand Superannuation Fund, and is focused on investing in established mid-market businesses. Taking companies to the initial public offer (IPO) stage is one of its stated goals.

Direct Capital director Gavin Lonergan said a share market listing wasn't front of mind for Bayleys this year or next.

"But certainly in terms of the size of company and its brand and leadership in the sector it operates in it would be a very good addition to the NZX."

Bayleys managing director Mike Bayley said the main focus at the moment was growing the firm, and there were no immediate plans for a public listing. "It's certainly a possibility in the future, as are many other alternatives."

The move to bring in an outside shareholder "had taken a lot of consideration".

"We could continue to grow as we have or we could really take an exponential step."

Despite the difficult economic environment Bayleys had a record revenue year last year. A weakened market and competitors provided plenty of opportunity, he said.

Its aim was to be New Zealand's largest full service property organisation. It was expanding its agency business in the main centres plus its property management, valuation and advisory and funds management operations.

Lonergan said New Zealand was distinct from other countries in that the private company sector offered the largest capital market.

As the economy recovered this was the time to be capturing market share, he said. A lot of Direct Capital's current activities involved working with companies to buy a competitor or make an acquisition in Australia.

"There are large pools of capital in New Zealand that have woken up to the opportunity that private companies offer."

Bayleys would not put a figure on the Direct Capital investment, but Lonergan said it usually put in between $15 million and $50 million.

Other Direct Capital investments have included Fishpond, New Zealand King Salmon, GoBus, EziBuy and Ryman Healthcare.