Kontiki Capital marks 10 years of growth

Investment banking group Kontiki Capital Limited is today celebrating its tenth anniversary of establishment in Fiji.

Kontiki Capital officially opened in July 1, 1998, by two foreign investors – Jack Lowenstein and John Courtney – the main objectives being to create a pool of capital from family and friends in Australia, New Zealand, Europe, US and Japan, and invest it in profitable growth businesses here to earn an income, investors better than average returns, and fund investment for Fiji’s growth.

And from what its founders claim was absence of “natural caution” when they decided to invest big bucks here, even accused of being “gin sipping beachcombers” a few years later, they now claim some success in these objectives.

“Our friends who backed us on day one in the Kontiki Fund have seen a compound return of 11.3 per cent in US dollars,” Lowenstein told guests at its celebration held at the Fiji Museum in Suva tonight.

“Not spectacular in an absolute sense, but respectable, and in a relative sense positively good compared to what they could have earned in other markets, even before the carnage we have seen in world financial markets in the last six months,” he said.

Lowenstein said Kontiki Funds had also provided capital to develop Fiji’s capital markets.

He said the most visible evidence was the doubling of companies listed on the South Pacific Stock Exchange (SPSE), which would now reach 17 when its current float Pleass Beverages & Packaging lists later this year or early 2009.

Lowenstein recalled that soon after he and Courtney recognised the need to build a team that could invest in private equity to incubate companies that would eventually be ready to list, Kontiki now managed two private equity funds – one for the Fiji National Provident Fund (FNPF) - Kontiki Capital Partners Fund and the other Kontiki Growth Fund that is listed on SPSE.

“Private equity is a business that requires patience and sometimes we have tried the patience of our backers in the the Kontiki Growth Fund whose returns have been a little meagre so far.

“However with the Pleass float on the SPSE, we are reaching a milestone in some ways more important than our birthday, the first listing of a KGF private equity investment on the stock market and one which we hope will start to justify the faith that KGF shareholders have shown in us,” Lowenstein said.

“All these broadened ambitions mean that today our team has swollen to 16 people. And over the years we have trained almost as many again, proud former colleagues, and in many cases shareholders who we now take great pleasure in seeing building their careers elsewhere in Fiji and overseas.”

While acknowledging investors and other stakeholders of the company for their investment, trust, advise and endorsement, Lowenstein said: “Today, we understand the natural caution that strangers from foreign lands with big plans engender in people in Fiji!”

He added: “I would like to reflect that just as Fiji is, for all its challenges, perhaps the only country in the world that will look back on 2008 as a year when its stock market rose nearly 20 per cent, thus out-performing most of the world by a modest 60 per cent, it will also be one of the few countries with a financial system un-rocked by any disruptions”.

“For our little part, we at Kontiki note that whereas in the US or Europe where investment banks had to gear themselves 20 or 30 times to get a suitable return before blowing up and going crawling to governments to seek bail outs, we like to think we have proven there is a model in investment banking which can be profitable with no gearing at all, zero debt and net cash.”