MEDIA RELEASE (NZ)

More New Zealand companies are choosing private capital over listing on the NZX, avoiding the costs, compliance obligations and scrutiny associated with being publicly listed, according to new research from Chartered Accountants Australia and New Zealand (CA ANZ), the University of Melbourne and the University of Queensland.

The New Zealand and Australian Financial Reporting Benchmarks 2026 reports found that growing access to private funding is making it easier for businesses to raise capital without the reporting, governance and disclosure requirements of a public listing. The shift is reflected in the number of NZX-listed companies, which fell 18 per cent between 2013 and 2024 from 155 to 126.

CA ANZ Reporting & Assurance Leader, Amir Ghandar, said the findings reflect changing perception of New Zealand’s public capital market, and highlight the importance of the next phase of the Government’s recently announced capital market reforms.

"A decade ago, businesses looking for significant growth capital often saw a public listing as the next step. Today many can access substantial private funding without entering public markets," Mr Ghandar said.

"While private markets play an important role in supporting business growth, strong public markets remain critical to the health of the economy."

"Public markets promote transparency, accountability and investor confidence through reporting, governance and disclosure requirements. A continued shift away from public markets could have implications for transparency and limit opportunities for the broader investor community to participate in the growth of New Zealand businesses."

"The challenge is finding the right balance between encouraging companies to list and preserving the standards that make New Zealand’s capital markets trusted and competitive."

Dr Mark Wallis from the University of Queensland said the decline in listed companies extends beyond Australia and New Zealand.

"This trend is not unique to Australia and New Zealand. Similar declines in listed company numbers have been observed in the United Kingdom and the United States," Dr Wallis said.

"That suggests there are broader forces at work, including the growth of private capital, mergers and acquisitions and changing company preferences about how they raise funds."

"Further research will help identify the most significant drivers behind this trend in Australia and New Zealand and enable a better understanding of what it means for investors, capital markets and economic growth," Dr Wallis said.

Mr Ghandar said policymakers should also consider reforms that improve the attractiveness and efficiency of public markets, such as the adoption of mandatory digital reporting for listed companies.

"High-quality, machine-readable financial information improves comparability and makes New Zealand’s market data easier for global investors to access and use," he said.

"If New Zealand wants diverse and internationally competitive capital markets, we need a clear understanding of how the market is changing and what those changes mean for companies, investors and the broader economy."