New Zealand’s KiwiSaver system now exceeds $130 billion in assets and is growing rapidly.
New Zealand doesn’t have a shortage of good companies. It has a shortage of sufficiently deep capital pathways to support them as they scale.
In 2025, there were three new listings on the NZX – Uvre, Manuka and Locate – compared with 92 on the ASX.
The issue is not simply the amount of capital in the system, but whether it remains deep enough as companies move from early success to sustained scale.
That is where the real challenge sits. New Zealand is reasonably good at creating businesses, but not as good at sustaining them through the critical middle stages – where companies move from early traction to national and global scale.
Technology features prominently in this conversation not because it is special, but because it is perhaps the clearest stress-test of the system. These businesses often require multiple rounds of capital, longer time horizons and investors willing to support them through uncertainty – making any gaps in the system more visible over time.
We often discuss innovation in terms of talent. In reality, it is just as often a question of capital structure. New Zealand has developed a growing ecosystem of angel investors, venture capital firms and private backers willing to support promising ideas in their early stages. At the other end of the spectrum, public markets provide a pathway to broader ownership and liquidity. Deep and liquid public markets also allow capital to be recycled more efficiently into the next generation of growth companies.
The difficulty often emerges in between – as companies grow, their capital requirements change. Funding rounds become larger. Expansion plans become more ambitious. Investors need to be able to commit capital for longer periods, often while accepting greater uncertainty around timing and outcomes.
This is where the challenge becomes more complex: finding enough capital at scale, at the right valuation, and for long enough.
New Zealand has developed many of the building blocks needed to support the early part of that journey, but fewer for businesses operating at scale. Once valuations move from the tens of millions into the hundreds of millions of dollars, the relevant investor universe changes materially. The conversation shifts from early-stage backers to larger institutions, private wealth networks and offshore capital markets with significantly greater depth.
As capital – and often ownership – moves offshore, it is not because local investors disappear, but because larger markets can offer deeper pools of capital, stronger sector expertise, greater competition for assets and, in some cases, higher valuations.
You can see it play out in practice. Rocket Lab ultimately found its long-term public market home in the United States. Halter has raised substantial offshore capital as it scales internationally. Xero spent years accessing Australian capital markets and investors as it grew into a global software company.
In each case, the question was not simply whether capital was available, but where the deepest and most competitive sources of capital could be found. None of this is unusual: every successful economy draws on international capital. What matters is not whether overseas investors participate, but whether domestic capital markets remain a credible option as companies mature and funding requirements increase.
An economy tends to reflect the preferences of its capital. Systems dominated by short-duration, highly liquid capital will tend to produce different outcomes from those supported by deeper pools of patient capital able to stay invested through multiple stages of growth.
The scale and maturity of a savings system can influence those preferences. New Zealand’s KiwiSaver system now exceeds $130 billion in assets and is growing rapidly. Australia’s superannuation system manages more than A$4 trillion. Scale matters.
Every successful economy draws on international capital. What matters is not whether overseas investors participate, but whether domestic capital markets remain a credible option as companies mature and funding requirements increase.
Larger pools of capital are often better able to tolerate illiquidity within part of their portfolios while still meeting the overall liquidity needs of investors. Over time, that can expand the range of investment opportunities available to them. KiwiSaver funds are already beginning to play a larger role in this part of the market and, as the system continues to mature, have the potential to become an increasingly important source of long-term growth capital.
This conversation is not unique to New Zealand. Similar debates have emerged in Australia around Atlassian and the United Kingdom around Wise, highlighting the tension between domestic capital markets and larger offshore alternatives. But offshore capital is not the problem in itself. International investment, partnerships and acquisitions have often helped New Zealand companies grow faster than the domestic market alone could support.
The point is not that companies access capital from overseas, but that the local system often lacks sufficient depth to remain competitive when those decisions are made. The challenge is to maintain credible pathways for companies as they move from early success to sustained scale.
Addressing this gap will require more than simply encouraging entrepreneurship. It will require deeper domestic pools of long-term capital, stronger pathways between private funding and public markets, and institutional investors willing to support companies through more stages of growth.
The goal is not to prevent companies from accessing offshore capital, but to ensure New Zealand remains a credible place to fund, scale and retain more of its successful businesses. That means building a system that is not only good at starting companies, but capable of backing them through the most difficult and capital-intensive stages of growth.
Because over time, what an economy is able to build and keep is shaped not just by the quality of its ideas, but by the depth of capital available to carry them further.
Disclaimer: This is intended to provide general information only. It does not take into account your investment needs or personal circumstances. It is not intended to be viewed as financial advice. You should not rely on any information in this communication in making financial decisions. Before making financial decisions you may wish to seek financial advice. Milford is an active manager with views and portfolio positions subject to change.
Milford Funds Limited is the issuer of the Milford KiwiSaver Plan and Milford Investment Funds. Please read the relevant Milford Product Disclosure Statement at milfordasset.com.