Perspectives
21 May 2025
With a highly developed, free market economy, strong institutional structures and a transparent regulatory regime, New Zealand has consistently ranked amongst the top economies for ease of doing business.1
Like many developed countries however, its reputation as a good environment for business is being challenged by a growing backlog of infrastructure underinvestment.2 The country’s infrastructure deficit is estimated at more than $NZ200 billion, acting as a handbrake on economic growth and productivity.3
As demographic change, digitalisation and climate change further pile on the pressure,4 harnessing the role of private capital by both central and local governments can both increase the pool of investable funds and deliver efficiencies and innovation.
The New Zealand Government has recently signalled an intent to attract more private investment and encourage market-led solutions to infrastructure challenges, as part of broader efforts to accelerate economic growth.5
To supplement domestic sources of capital, the government is making moves to streamline overseas investment regulation, including reforming the Overseas Investment Act to simplify the consenting process, in order to make New Zealand a more attractive investment destination for investors.6
Since the financial and economic reforms of the late 1980s,7 foreign direct investment into New Zealand has grown to around 40 per cent of GDP, though remains below the OECD average of over 50 per cent with the country’s screening regime for overseas investments perceived as a barrier.6,8
“Private capital is relatively underutilised in New Zealand infrastructure at the moment, but if proposed changes to regulatory frameworks, funding and financing rules, and unsolicited proposals come together with the right opportunities, that could quickly change,” says Ani Satchcroft, Co-Head of Infrastructure for Asia Pacific at Macquarie Asset Management.
Source: OECD
Due to size of the New Zealand market, deploying capital at scale is more of a challenge, given there are fewer opportunities big enough to attract large-scale investors, making improving its attractiveness to private capital even more important.
“Given New Zealand’s geographical location, investment in infrastructure that enables and enhances its global connectivity is especially important,” says Satchcroft. “To remain connected to and competitive with comparable jurisdictions, it’s essential to keep expanding capability in sectors such as digital infrastructure, logistics and transportation,” she adds.
With a presence in New Zealand since the early 1980s, Macquarie has a track record of navigating the local business and regulatory environment, having made a number of successful investments.
Following its acquisition of Australian fibre and network solutions provider Vocus Group in 2021, Macquarie Asset Management (MAM) acquired New Zealand telco 2degrees in 2022, merging the business with Vocus’ New Zealand operations.
Since then, MAM has worked with the 2degrees management team to grow the business and expand its market share across both the consumer and business market segments, and it is now the second largest provider in the country for broadband, driving competition and innovation in the market.
2degrees, a full service telecommunications provider and a Macquarie Asset Management (MAM) portfolio company, is the second-largest provider of broadband in New Zealand.
Along with access to capital to fund greater capacity and improved coverage, MAM has supported 2degrees with access to the significant expertise within its team and connectivity into its global network of portfolio companies to share industry best practice and learnings.
“Partnering with the private sector can provide access to the expertise needed to modernise and grow services. This can be especially beneficial in areas such as technological modernisation, where knowledge and experience from other markets can be a source of competitiveness,” says Satchcroft.
“MAM operates in over 32 markets around the world with more than 180 infrastructure businesses in our portfolio, giving us a deep understanding of how other countries are modernising and growing their infrastructure – including through carving out a greater role for private capital and the models they have in place to enable that,” she adds.
Along with digital infrastructure, Satchcroft says energy and healthcare infrastructure are other sectors that present opportunities in New Zealand.
In August last year, the government declared an ‘energy security crisis’ following a spike in energy prices caused by lower levels of renewable energy being generated and a natural gas shortage. It announced measures aimed at improving energy security and estimates $NZ100 billion of new investment is needed by 2050 to build and maintain the nation’s electricity transmission and distribution infrastructure.9
“Over 80 per cent of New Zealand’s energy needs are met by renewables,10 but ongoing supply resiliency of the grid is necessary and requires continued investment,” says Satchcroft.
Furthermore, an ageing population will require investment in the healthcare sector to both prepare it for and reduce future demand.
“While the core healthcare system is strong, encouraging additional private sector investment in healthcare-adjacent services, such as preventative screening, can help reduce the long-term financial burden on governments,” she adds.
Capital intensive and requiring significant upfront investment, both are sectors where the private sector can bring global experience. Energy and healthcare infrastructure are attractive to investors due to the predictable and consistent nature of the income they can provide.
Last year, a MAM fund entered into an agreement to acquire Linen Services Australia, the largest commercial laundry services provider in ANZ and which operates as Taylors in New Zealand. The company derives most of its revenue from healthcare adjacent services – including linen contracts with private and public hospitals, and aged care facilities. In 2020, MAM successfully divested its stake in aged care company Oceania Healthcare after listing the business in 2017.
In 2022, MAM acquired New Zealand telco 2degrees and merged it with Vocus’ New Zealand operations to create the country’s third-largest telco
In 2024, MAM entered into an agreement to acquire Linen Services Australia, the largest commercial laundry services provider in ANZ and which operates as Taylors in New Zealand
In 2020, MAM successfully divested its stake in New Zealand aged care company Oceania Healthcare after listing the business in 2017
Engaging private capital can also help with attracting the best human talent into an investment, bringing with it global skills, experience and insights from other markets.
“Being able to hire the best management teams can have a material impact on returns and a concentrated shareholding can make that easier – both through financial alignment and incentivisation, and the reputation of the private capital investors,” says Satchcroft.
New Zealand has a high quality of life and offering those who have been offshore for career opportunities a reason to return – such as for an investment that has private capital and respected investors behind it – creates a stronger talent pool and contributes to economic prosperity.
“Furthermore, when a reputable private entity invests in an asset, there is an assurance that a decision has been backed by thorough due diligence, there’s a robust business plan, and similar ventures have been successfully executed globally. This strategic approach can serve as a compelling advantage, attracting a highly talented pool of individuals,” says Satchcroft.
Many of the investments of the scale needed to appeal to foreign investors in New Zealand – particularly in infrastructure – are owned by the Crown and local councils. These include conventional ‘physical’ assets as well as ‘quasi-infrastructure’ ones – such as data repositories and other government services.
“Many governments – including at the state level in Australia – are beginning to recognise the benefit of commercialising intangible assets as a way of providing much needed investment for service expansion and modernisation,” says Satchcroft. “This requires a mindset of embracing the best models of service delivery and streamlining regulation.”
“Governments need to consider the appetite for private investment in a range of sectors, which will ultimately release public capital to be deployed elsewhere, while generating positive outcomes for the community," she adds.
In 2022, MAM – as part of a joint venture – entered into a 40-year concession with the Victorian Government in Australia to leverage private sector investment and expertise to modernise its driver and vehicle registration and licencing services - VicRoads. As part of the bespoke agreement, the Government retained an ownership stake, ensuring it kept control over regulation, policy and pricing of essential fees.
“VicRoads is a great example of a government being constructive about allowing private capital to play a role in the growth of the asset, aligning incentives and remaining financially exposed to the upside, providing a revenue stream that can be invested elsewhere,” says Satchcroft. “By working with them to understand where we could use our experience and capabilities, what they wanted to keep control over and what form of structure allowed us to balance the two, we’ve been able to support innovation in this essential community service.”
Referencing MAM’s role in managing VicRoads, along with three major land services registries in Australia, Satchcroft highlights how, as digitalisation continues apace, the private sectors expertise can be used to ensure government services and data repositories remain robust and secure, while delivering the efficient, quality experience consumers expect from commercial providers.
“We think about where communities are heading and where we can deliver innovation and efficiency to support them in that – quickly and cost-effectively,” says Satchcroft. “We’ve spent a lot of time looking at the New Zealand market through this lens, which has resulted in some great investments to date, and we think there are more opportunities for us to play a bigger role.”
Ani Satchcroft is a Senior Managing Director and the Co-Head of Infrastructure for Asia-Pacific in Macquarie Asset Management. She joined Macquarie in 2016 and is based in Sydney.
In her role, Ani is responsible for overseeing the asset management activities of the Asia-Pacific Infrastructure and Agriculture teams and is a member of the Investment Committees of numerous funds.
Ani has led major acquisitions in Australia and New Zealand across various infrastructure sectors, including digital, utilities and transport. She sits on the board of several portfolio companies, including VicRoads and Vocus Group.
Prior to joining MAM, Ani worked for several other infrastructure fund managers in London and Sydney, with a focus on regulated utilities and transportation assets across Europe. She has also worked as a Portfolio Manager in the listed infrastructure space.
She holds a Bachelor of Commerce and Bachelor of Laws (first class honours) from the University of Sydney and a Master of Business Administration (high distinction) from Harvard Business School, where she was a Baker Scholar.
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