NZ Super Fund named top sovereign wealth fund prize

This media release came in today about New Zealand's sovereign wealth fund. It's performing well, its success recognised across Asia. The NZ Super Fund has been awarded the Sovereign Wealth Fund prize at the 2018 AsianInvestor Institutional Excellence Awards in Singapore. The editorial team at AsianInvestor noted the NZ Super Fund's "longstanding o...
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NZ Super Fund wins YWCA Equal Pay Award

I read this media release from the New Zealand Super Fund with interest. I'm sure other companies could take a lead from the Fund in terms of their human resources policy. Features of the NZ Super Fund's new benefits package include a top-up to full pay for 26 weeks during primary carer parental leave, a KiwiSaver lump sum top up for unpaid parenta...
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Taking Tesla private: is it a pipe dream?

Saudi sovereign wealth fund money, the Public Investment Fund (PIF), is reportedly offering Elon Musk the money for Tesla to go private, to the sum of about USD $ 72 million. It supposedly has about USD $250 million in cash.? It is unlikely to be that easy. Nothing in Saudi Arabia, or the Middle East more widely, is as it seems. If a deal is secured could it be subject to a security review in the US?

This is what the Reuters correspondent in Riyadh, Andrew Torchia, wrote a few hours ago.

Saudi Fund may only play minor part in Musk's USD $72 billion Tesla plan- bankers

The fund is estimated to have over USD $250 billion in assets. But it is not that simple.

The Public Investment Fund (PIF) has many claims on its resources, both financial and political.

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NZ Superfund invests in US Rubicon

Media Release11 May 2018 

Auckland, 11 May 2018: The NZ Super Fund has added another expansion capital investment to its NZ$38b (US$27b) portfolio, investing US$65m in cloud-based waste and recycling technology company Rubicon Global (www.rubiconglobal.com/).

Headquartered in Atlanta, Rubicon Global ('Rubicon') provides an innovative technology platform for waste and recycling. It connects customers to a network of independent waste haulers and is leading the development of smart city products in the waste and recycling space. The company's goal is to help businesses, governments and organisations confidently execute on their sustainability goals through their waste management operations.

Mark Fennell, the NZ Super Fund's Acting Chief Investment Officer, said Rubicon provided an attractive opportunity for the Fund to increase its exposure to expansion capital.

Following the Rubicon investment, around 2% of the NZ Super Fund is invested in expansion capital investments. The Fund has direct investments in fuel cell manufacturer Bloom Energy, dynamic glass manufacturer View Inc. and waste-to-energy company LanzaTech. In New Zealand the NZ Super Fund has supported a large number of small and medium-sized high growth companies via external managers Direct Capital, Pioneer Capital, Pencarrow, Waterman Capital and Movac. 

Mr. Fennell said: "It's pleasing to be able to leverage our timeframe, scale and diversification to support growth companies such as Rubicon that, while established from a technology point of view, are pre-IPO. As a long-term investor, the NZ Super Fund is able to invest in high growth companies with a view to realising long-term potential. These expansion capital investments are an important part of our investment mix because they can help drive long-run returns."

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NZ SuperFund returns 19.8% for 2017

NZ Super Fund returns 19.8% for 2017 calendar year

The New Zealand Super Fund has performed very well over the past few years and last year was no exception. This is in despite of the fact that the world economy has been slowing over this period. Here are the most recent results.

Comments by Catherine Savage, Chair, and Adrian Orr, Chief Executive of the Guardians of New Zealand Superannuation, at the Finance and Expenditure Select Committee Catherine Savage, the Chair of the Guardians of New Zealand Superannuation, the Crown entity that manages the New Zealand Superannuation Fund, yesterday told the Finance and Expenditure Committee that the Fund's strong performance had continued, with a 19.8% return for the 12 months to December 2017 (after costs, before NZ tax). With the Government resuming contributions in December, the Fund stood at $37.9 billion. It has returned 10.5% p.a. (after costs, before NZ tax) since inception in 2003. In her update to the Committee Ms Savage said the Guardians was in good heart. "The Board is strongly committed to the Fund's long-term, growth-oriented investment strategies, and to its opportunistic approach to active investment." "We remain focused on identifying attractive active investments in New Zealand, with recent highlights including a $100m investment in New Zealand insurer Fidelity Life." "As is appropriate for a long-term investor with known cash flows, the Fund is heavily weighted towards growth assets, such as shares. While growth investments can be volatile over the short term, we can ride out and profit from any future market downturn." "Looking forward, the global economic outlook is better than it has been for several years. However, with many asset classes globally at or above full value, we do not expect annual returns in the teens and twenties to persist." "Returns are likely to normalise and over the long term we expect the Fund will deliver average returns of approximately 8% a year, based on current portfolio settings," said Ms Savage. Mr Orr said leading the Fund for the past 11 years had been a great privilege. "The Fund's successes as an investor can be linked to the anchoring of our investment strategies in our endowments and investment beliefs, and a disciplined approach to active management. Our independent governance, transparency and commitment to investing responsibly have also helped to establish the Guardians as a credible institution, and are acknowledged globally as sector-leading. I'm proud of the team's efforts and what we have achieved together."

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NZ Super Fund-Investment Environment Report-December 2017

In this 'Investment Environment Report' Mike Frith, Manager, Economics, explains the global investment environment and its implications for the NZ Super Fund.

Watch a short video of Mike Frith discussing the investment environment

Economic and market backdrop

Global growth is broad-based and appears robust across US, European, Japanese and emerging market economies. Forecasters expect this momentum to be sustained – the behaviour of central banks and US fiscal policy changes will have the biggest impacts through 2018. Investment markets have been characterised by a surplus of funds chasing financial asset returns. This glut in global liquidity has reduced interest rates, suppressed market volatility and pushed up the prices of financial assets. As a result, investors have observed actual returns well above our expectations across most asset classes.

How has the Fund performed?

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NZ Superfund excludes recreational cannabis companies

Companies involved in the recreational cannabis industry have been excluded from the $37 billion NZ Super Fund. The exclusion does not include companies involved with licensed and authorised medicinal cannabis.

The move follows a growing global trend to decriminalise and legalise the recreational use of cannabis, which has led to share market listings of companies involved in the industry overseas.

I’m curious about sovereign wealth funds- having worked in private equity in the Middle East for years- and how they decide what to invest in and what not to. It can’t be easy. I’m sure most sovereign wealth funds invest in anything, including the Abu Dhabi Investment Authority (ADIA). What they invest in is uncertain, especially given that many of the investment managers are ex-pats.

This report from the New Zealand Super Fund is informative in that it explains what the fund excludes and why it is leading the way.

Under the Guardians' Responsible Investment Framework, decisions about ethical exclusions take account of New Zealand law and international conventions to which New Zealand is a signatory. Recreational use of cannabis is currently illegal in New Zealand under the Misuse of Drugs Act 1975, and contrary to New Zealand's commitments to international drug conventions.*

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Hospitals and the NZ Super Fund

This week I’ve been visiting the Critical Care Unit at the hospital again. Today, one person was dying. He had pulmonary fibrosis and was at the top of the waiting list for a lung transplant. He picked up a lung infection before he got the transplant. About 10 people were standing around his bed, waiting for him to die, including the doctor, and a dog came in to see him. I wanted to cry, and I didn't even know him- but I've talked with his daughter and his wife.

 So it’s with relief that I am moving on to a more frivolous subject- even though I would not normally deem it to be frivolous- and that is the New Zealand Super Fund and the fact that the government is now resuming contributions. In fact, NZD 500 million will be paid tomorrow.

 Here is the press release.

 The Board of the Guardians of New Zealand Superannuation, the manager of the NZ Super Fund, has welcomed the resumption of Government contributions to the $37 billion Fund.

The Government plans to put $7.7 billion into the NZ Super Fund between now and June 2022, with the first payment to be made on Friday, 15 December.

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New New Zealand CEO Governor of Reserve Bank

Today’s announcement that the New Zealand Reserve Bank has appointed a new governor came as a surprise not because it was unexpected but because of whom it is. It is the CEO of New Zealand Superannuation Fund, Adrian Orr, who, by all accounts, has done a great job. I suppose I never imagined him moving.

 It seems that I’ve had associations with the last two governors of the Reserve Bank, and of that I’m surprised. I’ve interviewed Adrian Orr, as CEO of the Super Fund, when I’ve been working with the Private Equity International, then the outgoing Governor, Graeme Wheeler, was my former boss at Treasury.

Here’s an article about Adrian Orr’s appointment.

NZ Super Fund CEO Adrian Orr has resigned to take up the position of Governor of the Reserve Bank of New Zealand.

Catherine Savage, Chair of the Guardians of New Zealand Superannuation, the Crown entity that manages the NZ Super Fund, thanked Mr Orr for his service.

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Investment Environment Report - February 2017

I received this report from the NZ Super Fund earlier today. It provides some insights into the investment environment right now.

 In this 'Investment Environment Report', Dr Roland Winn, Senior Investment Strategist, explains the global investment environment and its implications for the NZ Super Fund.

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