From Public to Alternative Investments
The Immutable Laws of Intelligent Investing
The world's most sophisticated investors are moving aggressively into alternatives, and into new geographies. New Zealand's innovation ecosystem, the country that produced Xero and the co-founder of DeepMind, offers international investors a rare combination: institutional-grade alternative deal flow in a structurally uncorrelated market. Mana Tupu Capital is how you access it.
The Foundation
The Four Immutable Laws
Every successful investment strategy in history obeys these four principles. They are as relevant for a family office in Singapore as they are for a pension fund in London, and they are the foundation on which Mana Tupu structures every investment for international investors entering New Zealand's market.
Don't Lose Money
Warren Buffett's Rule #1 (and Rule #2: "See Rule #1"). Capital preservation is the first duty of any investor. The mathematics of loss are brutal. A 50% drawdown requires a 100% gain just to break even. Protecting downside is not conservative, it's essential.
Spread Risk Exposure
No single position, sector, or geography should threaten the whole. Risk must be distributed across multiple asset classes with different return drivers, so that no single event can destroy your portfolio.
Seek Asymmetric Risk/Reward
The best investors structure every position so the potential upside dramatically exceeds the downside. Risk $1 to make $5. This is the engine of wealth creation, engineering outcomes where you win big and lose small.
Diversify Genuinely
True diversification means owning assets that don't move together; across asset classes and across geographies. Genuine diversification requires uncorrelated return streams driven by fundamentally different economies, currencies, and market cycles.
"Most people think they're diversified. They own some large-cap stocks, some small-cap stocks, maybe some international stocks. But they all go down together. That's not diversification. That's an illusion." Victor Jiang, Director, Mana Tupu Capital.
The Shift
The Great Migration to Alternatives
Something extraordinary has happened in institutional investing over the past two decades. The most sophisticated investors on the planet, ultra-high-net-worth families, pension funds, endowments, have been systematically moving their capital out of traditional public equity markets and into alternative investments such as private equity, private credit, venture capital, and direct property.
The numbers are stark. Ultra-high-net-worth investors now allocate 46% of their total portfolio to alternatives—nearly half of everything they own. Pensions sit at 24%, and high-net-worth investors at 22%.1
Alternative Investments as a % of Total Portfolio
How the world's largest investors allocate to alternatives
This isn't a temporary trend. Global AUM in alternatives has tripled in the past decade—from roughly $7 trillion in 2014 to over $20 trillion today. Industry projections put that figure at $32 trillion by 2030.4 Private markets are growing at more than double the rate of public assets.5
But allocating to alternatives is only half the equation. The most sophisticated investors are also diversifying geographically, seeking exposure to high-growth innovation ecosystems outside the crowded, expensive markets of the US, Europe, and major Asian hubs. New Zealand, with its disproportionate track record of producing globally significant technology companies, represents exactly the kind of differentiated opportunity that institutional capital is increasingly pursuing.
The Opportunity
New Zealand: A Small Country That Builds Global Companies
For international investors unfamiliar with New Zealand's technology ecosystem, two names illustrate the scale of opportunity that emerges from this compact, English-speaking market of five million people.
These are not isolated exceptions. They are products of a national ecosystem that consistently produces research-anchored founders with global ambition; a lineage that stretches from Ernest Rutherford's Nobel Prize in 1908 to today's generation of FinTech, AgriTech, and Green Tech entrepreneurs. New Zealand's strong university programmes, pragmatic problem-solving culture, and English language talent pipeline create a commercialisation environment that punches dramatically above its weight.
For the international investor, the implication is clear: New Zealand is not just a geographic diversifier. It is an innovation diversifier. A compact research base producing globally competitive founders at valuations that remain far below Silicon Valley, London, or Singapore equivalents.
The Catalyst
The Shrinking Universe of Public Companies
One of the most important, and least discussed, structural shifts in global finance is the dramatic decline in the number of publicly listed companies. In the United States, listings peaked at over 8,000 in 1996. Today, that number has been cut roughly in half, to approximately 4,000.8
The reasons are multifaceted. Growing access to private capital through venture and growth equity means companies can stay private longer, avoiding the costly disclosure and compliance burden of public listing. Regulatory requirements like the Sarbanes-Oxley Act have made the costs of being public increasingly onerous. And the intense scrutiny of quarterly earnings cycles actively discourages the kind of long-term, transformative investment that builds great companies.
US Publicly Listed Companies: The Decline
Companies are choosing to stay private—and the opportunity set is following them
The implications are profound. Today, 87% of US companies with revenue greater than $100 million are privately held.9 The best growth, the most innovative companies, the biggest opportunities—they are increasingly found outside the public markets.
This dynamic is even more pronounced in New Zealand, where the most promising FinTech, AgriTech, and Green Tech companies are private, early-stage, and scaling rapidly. Xero itself IPO'd in its first year because New Zealand's venture capital market at the time was too small to fund its ambitions—the biggest funding round available was NZ$2–3 million.10 That constraint has eased, but the core reality remains: the best New Zealand deal flow is private, and accessing it requires local relationships and on-the-ground presence that international investors cannot replicate independently.
The Evidence
Alternatives Outperform. Consistently.
The data on alternative investment outperformance is not a matter of debate—it is a matter of record. Across private equity, venture capital, private credit, and direct real estate, the long-term returns have consistently exceeded those available in public markets.
Value of $1M Invested in 1986: Private Equity vs. Public Markets
37 years of compounding tells a dramatic story
$1M invested in private equity in 1986 grew to $139.6 million—more than 5× the S&P 500 and 11× the MSCI World over the same period.2
Long-Term Annualised Returns by Asset Class
Net IRR comparison across investment categories
Cambridge Associates' data, tracking over 1,600 private equity funds, shows that PE has outperformed the S&P 500 in periods longer than three years, and dramatically outperformed over ten-year-plus horizons.2 More recent analysis confirms that $1 invested in private equity in 2015 grew to $3.96 by 2024, compared to $3.51 for the S&P 500 and $2.61 for the MSCI World.11
Venture Capital Returns by Quartile (2004–2016)
Manager selection is everything—especially in under-noticed markets like New Zealand
The spread between top and bottom decile is over 41 percentage points. Access to top-tier managers is the single most important factor—and in smaller markets, where fewer managers operate, the advantage of picking the right partner is amplified.
Direct Lending: Historically Higher Yields
Asset class yield comparison
Private credit tells a similar story. The global private credit market has surpassed $1.5 trillion and is projected to reach $2.6 trillion by 2029.12 Across the APAC region, which includes New Zealand, private debt generated a CAGR of 10.1% from 2015–2021, accelerating to 11.4% from 2018–2021.13 For international investors, direct lending to quality New Zealand businesses offers attractive yield alongside genuine portfolio diversification through geographic and currency exposure that is structurally independent of the US, European, and major Asian credit cycles.
The Resilience Factor
Drop Less. Recover Faster.
Outperformance over full market cycles is compelling. But what truly separates alternative investments from public markets is what happens during the worst moments, because the first immutable law is don't lose money, and loss avoidance is where alternatives earn their keep.
Neuberger Berman studied three major market crises using Cambridge Associates data—the dot-com crash (2000–2003), the Global Financial Crisis (2007–2009), and the COVID-19 shock (2020). In every case, private equity experienced a significantly shallower drawdown and a faster recovery than public equities.14
Peak-to-Trough Drawdowns: Private Equity vs. S&P 500
In every major crisis, PE fell less and recovered faster
During the GFC, the S&P 500 fell 55% while private equity fell just 28%—roughly half the drawdown. During COVID, PE delivered annualised returns of 18% compared to just 2% for public markets.
The pattern is remarkably consistent. Across five major financial crises over 25 years, the dot-com crash, the GFC, the Eurozone crisis, COVID-19, and the 2022 inflation shock, global private equity outperformed the MSCI All Country World Index with an average annualised excess return of 8%.15
Why? Several structural factors work in private equity's favour during downturns:
Active ownership and operational control. PE managers don't passively hold shares. They sit on boards, restructure operations, manage costs, and deploy capital flexibly. Research from Stanford and Kellogg found that PE-backed companies actually increased capital expenditure during the GFC, gaining market share while public competitors retrenched.16
Flexible capital deployment. PE funds don't invest all their capital on day one. They call capital over time, meaning they can deploy more aggressively when valuations are depressed—buying into the downturn rather than being forced to sell. Historically, the best vintage-year returns have come from funds that invested during and immediately after recessions.17
Protection from panic selling. Because PE investments are illiquid, investors cannot panic-sell at the bottom. What sounds like a disadvantage is actually a structural protection. It prevents the single most destructive behaviour in investing: selling low out of fear. Long-term lock-ups enforce the discipline that most public market investors lack.18
Lower catastrophic loss rates. Hamilton Lane research found that the probability of catastrophic loss, defined as a 70% or greater decline with minimal recovery, is 18% for PE-backed companies, compared to roughly double that for public companies. Active management and flexible capital structures provide a genuine safety net.19
This is not just an academic observation. It is the primary mechanism through which private equity has generated its staggering long-term outperformance. The $139.6 million result from $1 million invested over 37 years isn't primarily because PE had better good years. It's because PE had far better bad years. The compounding advantage of not losing as much in downturns accumulates over decades into an enormous performance gap.
The same resilience applies across alternative asset classes. Private credit maintained the highest floor of any asset class in the worst 5-year periods from 1995–2022. Direct real estate, held privately, not through publicly traded REITs, showed similar downside protection. Even venture capital, the most volatile alternative asset class, saw its worst drawdowns moderated by the ability of fund managers to support portfolio companies through difficult periods rather than abandoning them to market forces.
For the international investor, alternatives in a geographically distinct market like New Zealand compound this resilience further. Your private equity, venture, and credit positions are insulated not only by the structural protections inherent to alternatives, but also by the fact that New Zealand's economy, currency, and business cycle operate independently of the US, European, and major Asian markets that likely dominate your existing portfolio.
"Everyone has a plan until they get punched in the mouth." The question isn't how your portfolio performs when markets are calm—it's whether it can take a hit and keep compounding. Alternatives can. Public markets, historically, cannot.Public markets are increasingly dominated by algorithmic and high-frequency trading systems that can amplify sell-offs in milliseconds, turning modest corrections into cascading crashes driven not by fundamentals but by automated momentum signals. In today's public equity markets, algorithms account for the majority of daily trading volume—machines selling because other machines are selling, in feedback loops entirely disconnected from the underlying value of the businesses being traded. Private alternative investments are structurally immune to this dynamic. There is no order book to be gamed, no stop-loss to be triggered, no algorithm front-running your position. Valuations are determined by actual business performance(revenue, cash flow, asset value) assessed quarterly by human managers with deep operational knowledge, not by microsecond price feeds. For international investors who have watched trillions evaporate in flash crashes and algo-driven liquidation events, this is not a minor distinction. It is a fundamental reason why private assets hold their value through the moments when public markets lose their minds.
The Problem
The Correlation Trap: Why Most "Diversification" Isn't
Of the four immutable laws, genuine diversification is the one most investors get wrong. And it's the one that matters most for protecting wealth through market downturns.
True diversification requires holding assets whose returns are not correlated—meaning they don't move in the same direction at the same time. The entire point is that when one asset class falls, another holds steady or rises, smoothing your overall returns and protecting your capital.
This is where publicly traded REITs reveal an uncomfortable truth—and where investing in a structurally different geography becomes a genuine advantage.
The REIT Correlation Problem
Publicly traded REITs move with stocks—defeating the purpose of "real estate diversification"
The MSCI REIT Index showed a correlation of 0.77 with the S&P 500—moving almost in lockstep. Private real estate operates on an entirely different cycle.20
Many investors believe they are diversifying into real estate by purchasing REITs. But because REITs trade on public stock exchanges, they inherit all the sentiment, volatility, and correlation of the broader equity market. During the Global Financial Crisis, when diversification was needed most, REITs fell even harder than the S&P 500.
Compare this with direct private real estate, private equity, or private credit, which show dramatically lower correlations with public equities. These assets derive their returns from fundamentally different sources—operating income, asset value, contractual cash flows—rather than from daily market sentiment.
Now add a geographic layer. For an investor whose portfolio is concentrated in US, European, or Asian markets, private alternative assets in New Zealand provide a double decorrelation: the structural decorrelation of private versus public, and the geographic decorrelation of a commodity-linked, Southern Hemisphere economy with its own currency, interest rate cycle, and business fundamentals. Your New Zealand venture, credit, and property investments are driven by local economic dynamics that are structurally independent of the markets that dominate your existing exposure.
Owning REITs alongside an equity portfolio is like wearing two life jackets on the same boat. If that boat sinks, both life jackets go under. True protection requires a different vessel entirely—ideally in different waters.
The Challenge
The Access Problem
The evidence is clear: private equity, private credit, venture capital, and direct real estate consistently outperform public markets, offer genuine diversification, and better protect capital. New Zealand's innovation ecosystem produces globally competitive companies at valuations far below major market equivalents. The opportunity is compelling on every axis. But one critical problem remains: access.
How does an investor in Singapore, Hong Kong, Dubai, or London access the next Xero at the pre-IPO stage? How do you find quality deal flow in New Zealand's FinTech, AgriTech, and Green Tech sectors from the other side of the world? How do you conduct diligence on early-stage companies in a market you may not know intimately, ensure proper governance, and structure investments to protect your downside?
This is the access gap that defines alternative investing—and it is amplified by distance. The best alternative investments have always been restricted by high minimums, complex structures, and the sheer difficulty of identifying top-quartile managers. In a smaller, relationship-driven market like New Zealand, the gap between insiders and outsiders is even more pronounced. The best deal flow goes to managers with deep local networks, governance experience, and the on-the-ground presence to source, diligence, and steward investments through to exit.
This Is Where Mana Tupu Comes In
Mana Tupu Capital is a Queenstown-based fund management company that exists to bridge the gap between international capital and New Zealand's innovation ecosystem. We provide institutional-grade access to the alternative investment categories that family offices and endowments have relied on for decades—private equity, private credit, venture capital, and direct property—structured specifically for international investors seeking genuine geographic diversification.
Our approach is built on the immutable laws: protect capital first, spread risk across genuinely uncorrelated assets, structure every investment for asymmetric upside, and diversify beyond the limitations of the public markets and geographies that already dominate your portfolio. We focus on New Zealand's highest-conviction sectors—FinTech, AgriTech, and Green Tech—sourcing the kind of research-anchored, globally ambitious deal flow that produced companies like Xero and founders like Shane Legg.
New Zealand builds global companies. Mana Tupu gives you access to the next ones.
Start the ConversationThis material is for informational purposes only and does not constitute investment advice, an offer, or solicitation. Past performance is not indicative of future results. All investments involve risk, including possible loss of capital. Alternative investments are speculative, illiquid, and suitable only for investors who can bear the loss of their entire investment. References to specific companies (Xero, DeepMind) are for illustrative purposes only and do not constitute investment recommendations. Mana Tupu Capital Limited does not claim any affiliation with these companies. Mana Tupu Capital Limited is registered in New Zealand.
References & Sources
1 Willis Towers Watson, Global Pension Assets Study 2024; KKR, 2024 High Net Worth Investor Survey. UHNW alternative allocation of 46%, pension fund allocation of 24%, HNW allocation of 22%.
2 Cambridge Associates LLC, US Private Equity Index and Selected Benchmark Statistics, data as of March 31, 2023. US Private Equity Index, net of fees, expenses and carried interest. 1,505 funds formed 1986–2022. $1M invested in 1986: PE grew to $139.6M (14.28% net IRR), S&P 500 to $26.3M (9.24%), MSCI World to $12.4M (7.0%).
3 Stock Analysis (stockanalysis.com), Xero Limited (ASX: XRO) Market Capitalisation. Since November 8, 2012, Xero's market cap increased from A$468.18M to A$13.18B, a gain of 2,715.43%, representing a compound annual growth rate of 28.55%. Current NZ$ market cap of NZ$16.10B as reported by CompaniesMarketCap.com, as of February 2026.
4 Preqin (a part of BlackRock), Private Markets in 2030 Report, October 2025. Global alternative assets AUM projected to reach $32 trillion by 2030. Previous Future of Alternatives 2029 report (September 2024) projected $29.2 trillion by 2029, with the $30 trillion threshold expected to be crossed by 2030. Annualised growth rate of 9.7% from end-2023 to 2029.
5 Preqin, Future of Alternatives 2029, September 2024. Private equity AUM forecast to more than double from $5.8T (end-2023) to $12.0T (2029) at 12.8% annualised growth. Private equity expected to represent approximately 6.0% of combined public and private equity markets by end-2024.
6 Wikipedia, Xero (company); PitchBook, Xero Company Profile; ASX, "Xero uses ASX to go global". Xero founded 2006 in Wellington by Rod Drury and Hamish Edwards. IPO'd on NZX at NZ$15M. Peter Thiel's Valar Ventures invested NZ$4M in 2010, followed by additional rounds totalling US$16.6M (Feb 2012), $49M (Nov 2012), NZ$180M (Oct 2013). Xero achieved NZ$10B market cap by September 2019. 3.5M+ global subscribers. 4,610 employees (PitchBook). Melio acquisition announced June 2025 for US$2.5B in cash and stock, with up to $500M in additional payments.
7 Mana Tupu Capital, "DeepMind: a modern Kiwi connection to global AI leadership", December 2025, manatupu.co.nz/deepmind/. Shane Legg educated at University of Waikato and University of Auckland. Co-founded DeepMind, acquired by Google in 2014. Key milestones: AlphaGo defeated Go world champion (2016), AlphaFold protein-folding breakthrough (2020).
8 U.S. Securities and Exchange Commission (SEC), Statistics & Data Visualisations; World Bank, Listed domestic companies data; National Bureau of Economic Research (NBER), various working papers on public company listings. US public listings peaked at approximately 8,000 in 1996, declined to approximately 5,295 by 2003 (post dot-com), and stand at approximately 4,000 as of 2024.
9 McKinsey & Company / Capital IQ analysis, as cited in multiple industry reports. 87% of US companies with revenue exceeding $100 million are privately held.
10 Rod Drury, founder of Xero, in interview with David Yuan, TCV, "The Xero Story: Building a Global Platform Out of New Zealand", LinkedIn, February 2021. "Back in those days, the New Zealand venture capital market was very small, probably, the biggest funding round was 2 to 3 million bucks."
11 Cambridge Associates LLC, Private Equity Index performance update, 2024. $1 invested in private equity in 2015 grew to $3.96 by 2024, compared to $3.51 for the S&P 500 and $2.61 for the MSCI World.
12 Preqin, Future of Alternatives 2029, September 2024. Global private credit AUM exceeded $1.5 trillion by end-2023 and is projected to reach $2.64 trillion by 2029. Private credit identified as one of the fastest-growing alternative asset classes.
13 Preqin / J.P. Morgan Asset Management, APAC private debt data. Private debt in the APAC region generated a CAGR of 10.1% from 2015–2021, accelerating to 11.4% from 2018–2021.
14 Neuberger Berman, "The Historical Impact of Economic Downturns on Private Equity", 2022. Analysis using Cambridge Associates LLC US Private Equity Buyout Index. Peak-to-trough drawdowns: Dot-com crash — PE -27%, S&P 500 -47%; GFC — PE -28%, S&P 500 -55%. PE experienced less significant drawdowns and quicker recovery than public equities in all three periods studied (2000–2003, 2007–2009, 2020).
15 Schroders Capital, "Private Equity's Resilience During Major Crises: a 25-Year Analysis", 2024, published via Institutional Investor. Global private equity outperformed the MSCI ACWI Gross Index during each of five major disruptions (dot-com crash, GFC, Eurozone crisis, COVID-19, return of inflation) with an average annualised excess return of 8%. During COVID-19, PE achieved annualised returns of 18% versus 2% for public markets.
16 Stanford Institute for Economic Policy Research (SIEPR), "Private Equity and Financial Fragility during the Crisis", 2017. Researchers from Stanford University and the Kellogg School of Management found that PE-backed companies increased capital expenditure during the GFC compared with peers lacking PE sponsorship, leading to higher market share and asset growth. As cited in Moonfare, "Private equity during the dot-com crash and the great recession", 2025.
17 Bain & Company, "The Impact of Covid-19 on Private Equity", 2020. Analysis of vintage year returns showing that funds investing during and immediately after downturns historically generated superior returns. Median net IRRs climbed to 14.7%, 15.0%, and 15.3% in 2010, 2011, and 2012 vintages respectively, following the GFC.
18 Morgan Stanley, "Top 5 Mistakes Investors Make in a Market Sell-Off", 2022. Illiquidity in private equity acts as a structural protection against panic selling, which typically results in higher losses. As cited in Moonfare analysis.
19 Hamilton Lane, Market Overview, 2018. Catastrophic loss defined as a 70% or greater decline in peak value with minimal recovery. Risk of catastrophic loss for PE-backed companies is 18%, approximately half the rate observed for publicly listed companies. As cited in Moonfare, "Private equity during the dot-com crash and the great recession", 2025.
20 MSCI, REIT Index correlation analysis; Sortis Holdings, private vs. public real estate correlation research; academic research including Case et al. and Rahman (2024). MSCI US REIT Index showed a correlation coefficient of 0.77 with the S&P 500. Direct private real estate showed a correlation of approximately 0.15 with the S&P 500.
Additional data sources referenced in charts: Burgiss (PE benchmarking), Cliffwater (direct lending index), BofA Securities (high yield and investment grade bond data), Bloomberg (market indices), J.P. Morgan Asset Management (multi-asset yield comparisons), Nareit (REIT index data), CAIA (private equity weathering storms analysis), Capital Dynamics and Cambridge Associates (private equity GFC analysis).
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