Spotlight falls on serial Kiwi investor
Venture capitalist Bill Birnie is under pressure from disgruntled investors and facing court action over soured Northland property deals. He talks to Andrea Fox
Friday, January 29 2010 || News || BY Andrea Fox - The Independent
When some of the 30-odd senior executives moved on, Birnie and his remaining colleagues branched out into high-rise property development in Wellington, and ‘‘against my judgment’’ was persuaded to rebrand the firm, Birnie Capital Partners. Today the company has six fulltime staff in Fay Richwhite’s former upmarket haunt, the 28th floor of 151 Queen St, Auckland. It’s a space so under-utilised they could play a game of cricket without disturbing anyone. Relocating the offices is on Birnie’s 2010 To Do list – though he still wants to work out of the central city.
Birnie Capital Partners will carry on, along with Birnie’s property development companies selling blue chip lots in farm parks Bream Tail at Mangawhai, half-an-hour north of Auckland, and Mataka Station in the Bay of Islands.
Birnie says interest in the high-end priced lots is picking up but ‘‘values are impaired’’.
As Birnie talks, there’s no sign of the raw, aggressive drive Chris Lee encountered all those years ago. It is a reflective, even grim, man on show today, recounting his mistakes and marshalling his mental resources for the year ahead.
Getting the real oil on what Birnie’s investors think of him and his performance is difficult for two reasons: the same people, mostly high net worth, tend to be shareholders in his various companies; and nearly everyone seems to be Birnie’s ‘‘friend’’.
Even GPG’s Tony Gibbs, who ‘‘banged noses with Bill over Enza’’ and has had little to do with him since, has a kind word: ‘‘I’m sorry to hear Bill is having a spot of bother but I’m sure Bill will confront it and work through it.’’
And an out-of-pocket Protemix shareholder dismissed the suggestion Birnie is a serial entrepreneur but a poor businessman. ‘‘He’s better than that. But sometimes he doesn’t choose the right people to run the businesses. It is a bit of a recurring failure. But the fact of the matter is a lot of these deals are high risk.’’
Birnie is frequently described as ‘‘charming’’, but the number of people he says gave him a courtesy call after The Independent rang them for comment (most wouldn’t speak on record) suggests he has a genuinely strong support network in New Zealand Inc.
Wellington’s Grant Corleison, who introduced Birnie to the science behind Protemix, is the exception. And Birnie says there are a handful of other Protemix investors ‘‘disaffected’’ with him. He appreciates their position and says that some criticism, for example around his formal communication to shareholders about Protemix’s financial position, is ‘‘justified’’.
Birnie’s former partner Michael Fay says angry scalded investors go with the territory.
‘‘People on the other side don’t want to hear; they’re hurting and scared. It’s had a massive impact on their life in some cases. What can you say in response? In every investment David and I went into where people lost money, we lost more.’’
Fay says he has not invested in any Birnie ventures only because he and Richwhite ‘‘didn’t move to Europe to invest in New Zealand’’. But he notes that in ventures where the rewards are potentially massive, so is the risk. ‘‘Bill is very straightforward. I knew him over a long period. He is a friend, a good person to work with, hardworking, ethical and very smart.’’
A former Fay Richwhite colleague, who would not be named, remembers Birnie as ‘‘energetic, inspired and quite visionary’’.
‘‘He made a very important contribution to Fays. It was full of extraordinarily capable people. Notwithstanding what people said, its shareholders were quite moral people but it encouraged a highly opportunistic breed of person.’’
So does Birnie still have the energy and ‘‘absolute positivity’’ of those earlier days? ‘‘Just ask my 16-year-old son about my energy levels when I’m playing cricket with him,’’ he responds. ‘‘I’ll always get the energy.
‘‘This [time] is about looking for opportunity. Just because there is a global crisis the world doesn’t stop. There should be more opportunities, really. You have to have the energy.’’
Will he pull through?
‘‘I’d like to think so. If something was going to happen I think it would have by now. Those that are still standing, with a bit of a tail wind, they should still be standing [in the future].’’
Birnie says, like everyone else, he has debt, but also has ‘‘good assets’’.
‘‘It will take a process over a year or two to get to levels I will be comfortable with.
‘‘I’m an entrepreneur and an active investor and, of course, a major economic meltdown is going to have a major impact. I will work diligently and tirelessly until these businesses are strong and standing on their own two feet.’’
But his major intent is downsizing. About 50 companies registered with the Companies Office carry his name as a director or shareholder. Many are inactive, he says, and soon all but a handful will be liquidated. The beleaguered Birnie is recapitalising and consolidating his business kingdom.
‘‘The world has changed. Everyone needs to stop and have a look at themselves. This is an ideal opportunity to do this; it would be foolhardy not to. We have to adapt. We can’t assume it will bounce back. We have to be diligent, creative, keep our head down and move forward in a positive light but also be realistic about what might follow.’’
Birnie says he’s been criticised for being too thinly spread. He is reconsidering whether he wants to be as ‘‘intimately’’ involved in a business as previously because of the time it takes. After consolidation and recapitalisation Birnie says he will have pared down his interests to six key venture capital investments:
- Surgical instruments company Orthopaedic Synergy, of which he is the major shareholder. It is his biggest investment and a ‘‘good New Zealand export story, growing by 50% a year with a very positive outcome ahead this year’’, he says.
- Protemix, which could be resuscitated by an imminent clinical trial in India, though Birnie isn’t promising anything.
- Struggling natural skincare export company Living Nature, of which he owns a third (Stephen Tindall recently bought 20%).
- Enztec, a Christchurch technology company 100% owned by Orthopaedic Synergy.
- Emech, a valve export company with big customers such as Coca- Cola.
- MonstaVision, the advertising video company.
Birnie Capital Partners will carry on, along with Birnie’s property development companies selling blue chip lots in farm parks Bream Tail at Mangawhai, half-an-hour north of Auckland, and Mataka Station in the Bay of Islands.
Birnie says interest in the high-end priced lots is picking up but ‘‘values are impaired’’.
As Birnie talks, there’s no sign of the raw, aggressive drive Chris Lee encountered all those years ago. It is a reflective, even grim, man on show today, recounting his mistakes and marshalling his mental resources for the year ahead.
Getting the real oil on what Birnie’s investors think of him and his performance is difficult for two reasons: the same people, mostly high net worth, tend to be shareholders in his various companies; and nearly everyone seems to be Birnie’s ‘‘friend’’.
Even GPG’s Tony Gibbs, who ‘‘banged noses with Bill over Enza’’ and has had little to do with him since, has a kind word: ‘‘I’m sorry to hear Bill is having a spot of bother but I’m sure Bill will confront it and work through it.’’
And an out-of-pocket Protemix shareholder dismissed the suggestion Birnie is a serial entrepreneur but a poor businessman. ‘‘He’s better than that. But sometimes he doesn’t choose the right people to run the businesses. It is a bit of a recurring failure. But the fact of the matter is a lot of these deals are high risk.’’
Birnie is frequently described as ‘‘charming’’, but the number of people he says gave him a courtesy call after The Independent rang them for comment (most wouldn’t speak on record) suggests he has a genuinely strong support network in New Zealand Inc.
Wellington’s Grant Corleison, who introduced Birnie to the science behind Protemix, is the exception. And Birnie says there are a handful of other Protemix investors ‘‘disaffected’’ with him. He appreciates their position and says that some criticism, for example around his formal communication to shareholders about Protemix’s financial position, is ‘‘justified’’.
Birnie’s former partner Michael Fay says angry scalded investors go with the territory.
‘‘People on the other side don’t want to hear; they’re hurting and scared. It’s had a massive impact on their life in some cases. What can you say in response? In every investment David and I went into where people lost money, we lost more.’’
Fay says he has not invested in any Birnie ventures only because he and Richwhite ‘‘didn’t move to Europe to invest in New Zealand’’. But he notes that in ventures where the rewards are potentially massive, so is the risk. ‘‘Bill is very straightforward. I knew him over a long period. He is a friend, a good person to work with, hardworking, ethical and very smart.’’
A former Fay Richwhite colleague, who would not be named, remembers Birnie as ‘‘energetic, inspired and quite visionary’’.
‘‘He made a very important contribution to Fays. It was full of extraordinarily capable people. Notwithstanding what people said, its shareholders were quite moral people but it encouraged a highly opportunistic breed of person.’’
So does Birnie still have the energy and ‘‘absolute positivity’’ of those earlier days? ‘‘Just ask my 16-year-old son about my energy levels when I’m playing cricket with him,’’ he responds. ‘‘I’ll always get the energy.
‘‘This [time] is about looking for opportunity. Just because there is a global crisis the world doesn’t stop. There should be more opportunities, really. You have to have the energy.’’
Will he pull through?
‘‘I’d like to think so. If something was going to happen I think it would have by now. Those that are still standing, with a bit of a tail wind, they should still be standing [in the future].’’
Birnie says, like everyone else, he has debt, but also has ‘‘good assets’’.
‘‘It will take a process over a year or two to get to levels I will be comfortable with.
‘‘I’m an entrepreneur and an active investor and, of course, a major economic meltdown is going to have a major impact. I will work diligently and tirelessly until these businesses are strong and standing on their own two feet.’’
