FMA optimistic about state of private asset investment in New Zealand

On 15 April 2026, the Financial Markets Authority – Te Mana Tātai Hokohoko (FMA) released a report summarising the findings of its survey of a sample of managed investment scheme (MIS) managers' investment in private assets. The report follows developing trends worldwide of increasing retail investors' exposure to private assets, with the FMA anticipating a similar trend in New Zealand.

The FMA published the report in support of its regulatory priority of 'understanding emerging risks and issues' as introduced in the 2025/26 Financial Conduct Report. See our insights on the Financial Conduct Report here.

 

The survey

The FMA surveyed a sample of 30 local MIS managers about their investment in private assets, including their approaches to valuation, the diligence and oversight applied to these valuations, and how conflicts of interest are identified and managed. Sixteen managers responded to the survey.

In its report, the FMA observed two models for how managed funds gain exposure to private assets – directly held investments in private assets, and investment in assets managed by another (related or unrelated) fund manager (ie, indirect investments).

While indirect investments are more common, with most of the investment value in private equity, private debt and infrastructure equity, the directly held investment portfolio is much larger. Most of the directly held investment value is in real estate equity, private debt, private equity and real estate debt. The FMA also observed a growing trend towards venture capital, being the most popular indirect investment type reported by number of investments (rather than investment value).

The majority of results presented in the report are based on responses from the seven managers (of 16 respondents) who hold investments in private assets.

 

The results

While overall MIS (including KiwiSaver) exposure to private assets is currently low compared to other comparable jurisdictions (at the retail fund level, less than 5% of total AUM is invested in private assets), of the 16 MIS managers who took part in the survey, more than half planned to either increase their current holdings of private assets or allocate to, or consider allocating to, the sector for the first time over the next three years.

 

Key trends

The FMA identified several key trends from survey responses:

• Playing the long game: Of the seven fund managers who have been investing in private assets, five have been doing so for at least five years. This suggests that investment in private assets is part of a deliberate, long-term strategy, rather than a short-term response to market conditions.
• Still gaining ground: Investment in private assets is expected to continue growing. All managers with current private asset exposure have engaged in at least one new investment within the last three years. Most expect to expand their exposure over the next three years.
• Exposure is mostly mixed: Most fund managers who hold private assets hold them both directly and indirectly.
• Bigger tickets, fewer players: Direct investments are higher in value, but less common. Despite making up most of the total private asset value disclosed (over NZD1 billion – exceeding the value of indirect investments by more than double), fewer managers invest directly in private asset investments.

 

Current valuation practices

The report states that both direct and indirect methods for private asset valuation come with underlying risks that must be appropriately managed.

• A blended approach: The FMA found variance in the main valuer used for each directly held investment, with most opting for valuation via an in-house valuation team, some using an independent valuer, and some utilising both approaches. Using both approaches is encouraged by the FMA, which refers to recent Australian Securities and Investments Commission (ASIC) recommendations in respect of private credit assets, for valuation to be either undertaken independently or reviewed independently on a quarterly basis.
• Risk of infrequent valuations: Infrequent valuations increase the risk of inequitable treatment for investors. Both ASIC and the UK’s Financial Conduct Authority have recommended quarterly cycles for private asset investment valuations. However, several New Zealand investments included in the survey are currently being valued on an annual basis, increasing the risk of the stated value of the private asset becoming stale.
• Good governance: In addition to having sound valuation policies and methodologies, MIS managers also need good governance and oversight of private assets to ensure valuations are being conducted correctly and independently. Examples of such measures include having a clear separation of duties between those preparing and approving valuations, direct oversight and approval of valuation methodology by investment committees and boards, and regular audits conducted by external auditors.

 

Our view

The report is positive, with the FMA feeling ‘encouraged’ by what MIS managers told it about their valuation practices for private assets. Most appear to be following international standards and have sound practices in place for identifying and managing risks, including risks associated with related-party investments.

The FMA highlighted several areas where it believes fund managers could better manage risk. This includes improving communication to investors about how asset valuation frequency for indirect investments contributes to daily unit pricing, being able to require out-of-cycle valuations (especially during periods of increased market volatility), and increasing visibility of the inputs and assumptions used by external valuers for indirect investments.

The report is notably silent on liquidity considerations, with the FMA deferring to its 2024 Liquidity risk management guide. Liquidity remains a key issue for retail exposure to private assets, particularly for KiwiSaver providers, which must comply with the statutory portability rules in the KiwiSaver Act. We note that the Ministry of Business, Innovation and Employment consulted on potential amendments to the KiwiSaver settings to facilitate further private asset investment, including liquidity risk management tools, but these are yet to be implemented by lawmakers.

The FMA recognises the need to better understand valuation practices in New Zealand and will continue to engage with fund managers and their supervisors to learn more about how private asset risks are managed, and to identify strategies that will reduce risks in these areas as investment in private assets increases. We expect these engagements to focus on the key risks identified by the FMA above.

The report speaks to the general direction of travel in the market towards increased investment in private assets, particularly by KiwiSaver providers. As equity markets become more concentrated and geopolitical conditions remain volatile, the diversification benefits of private assets are becoming increasingly attractive. As MIS managers move further into this space, the need for robust diligence, governance, and risk management around private asset investments will become increasingly important. DLA Piper is well placed to assist with investment diligence, drawing on deep expertise across the globe on key regulatory, governance and transactional considerations for private asset investments.