Direct Capital buys into Bayley as minority shareholder

Mike Bayley. Photo / Supplied

Bayley Corporation has brought Direct Capital into its business as a minority shareholder to help finance a major expansion programme which will see the company significantly increase the scope and scale of its operations throughout New Zealand.

Mike Bayley, managing director Bayley Corporation, says the growth programme will be based around increasing the scope and depth of agency services that Bayleys provides for its clients - particularly in the realms of property management, valuations and advisory, and funds management.

"This expansion had already commenced with the growth of the company's valuations team in Wellington, and increasing turnover from the firm's steadily developing commercial property management group," Bayley says.

"To support this continued growth, Direct Capital managing director Ross George will join our board. However, I stress that the majority interests of Bayley Corporation will remain within Bayley family ownership."

Direct Capital is a well known investor in private companies, having raised more than $800 million to invest in 36 companies since its first fund was raised in 1994.

Owned by its senior executives, its investment team has been together for an average 14 years of its 16-year history.

Direct Capital's latest fund, Direct Capital IV, completed its fund raising in December 2009 raising $325 million to invest in private companies over the next three to four years.

The New Zealand Superannuation Fund is a significant investor in the fund. The investment in Bayleys is the second investment made from Direct Capital IV.

"The professional property management and services sector is a significant part of the economy, and Bayleys is fast emerging as the leading service provider within this market," George says.

Direct Capital invests into private companies to provide the capital to grow and continue creating value.

Direct Capital has invested in such companies as Fishpond, New Zealand King Salmon, GoBus, Shears & Mac4, Rodd & Gunn, Stratex, EziBuy, Ryman Healthcare, and Max Fashions.

The investment coming from Direct Capital will be used exclusively for expansion initiatives across those companies coming under the Bayley Corporation umbrella - most notably Bayleys Franchise Group, Bayleys Property Management, Bayleys Valuations and Advisory, and Bayleys Real Estate agency operations.

"Bayleys is a company that Direct Capital has followed over a number of years," George says. "It's a company that has continued to perform exceedingly well through this cycle - confirming the strength of its brand, outstanding management, and market position in New Zealand.

"Our investment in the Bayleys brand not only provides a capital input allowing the company to grow and expand, but also broadens the shareholder base from the family to now include institutional capital - an important part of continuing to grow the business."

Mike Bayley said the real estate agency and professional property services markets would see a growing Bayleys presence across the wider property sectors as it realised its goal to be New Zealand's leading full-service real estate agency.

There would be no change to the day-to-day operations of any of the Bayley Corporation companies but Bayleys staff and clients would begin to see a wider range of products and services being offered by the company - all of which would significantly enhance Bayleys' current offerings.

"The board of Bayley Corporation and I are excited about the future growth opportunities that lie ahead and the resultant broader horizons which have now materialised as a result of our new partnership with Direct Capital," Bayley said.