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Super Fund sets up 'investment hub'

NZ NewswireNZ Newswire 21/09/2016 Fiona Rotherham

The New Zealand Superannuation Fund is setting up an "investment hub" to discuss opportunities it can create with local partners such as iwi within New Zealand where it has a "hometown advantage".

Chief executive Adrian Orr said the fund was talking to decision-makers who have access to particular resources such as land, agriculture, and aquaculture where it could bring in the necessary capital and global capability to make the investment "go better, faster".

Under the fund's mandate, it can't be the controlling shareholder in a company but Orr said it was looking to do more co-investment locally with other partners as it is doing with the Accident Compensation Corp in Kiwibank, and other sovereign wealth funds as it did with its single largest investment, the Kaingaroa Forest.

The fund has already partnered with Ngai Tahu and New Ground Capital late last year in a $113 million new housing development, its first foray in the Auckland housing market that will see 200 new homes built by 2018.

Orr said the fund had been "flat out" in the past 13 years investing in suitable opportunities of scale in New Zealand that had turned up at its door but these had now largely run out and it was now looking to create ideas that still stack up against its expected returns, liquidity and long-term horizon.

Infrastructure such as a second Waitemata Harbour crossing is an obvious example of the type of investment it could consider, he said, with Auckland being the pinch-point for national infrastructure needs over the next 30 years given its population is forecast to grow by another 716,000 by 2045.

The problem to date has been local and central government ownership has precluded third-party capital but Orr sees that changing.

"I hope it does. There has been a change globally as this is not a unique New Zealand situation," he said.

The fund has about 12 per cent of its total capital allocated to New Zealand and while some might say it was already over-weight in its own country, Orr said he's willing to shift that even higher for the right opportunities given globally it has become harder to find attractive investments.

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