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New Zealand Superannuation Fund

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New Zealand Superannuation Fund
Company typeSovereign wealth fund
IndustryInstitutional Investment
Founded2001; 23 years ago (2001)
FounderMichael Cullen
Headquarters
Auckland
,
New Zealand
Key people
  • Grant Robertson - Minister of Finance
  • Catherine Savage - Chairman of the Board
  • Matt Whineray - Chief Executive Officer
  • Stephen Gilmore - Chief Investment Officer
Increase $4.0 Billion (Year to June 2018)[1]
Total assetsIncrease $43.8 Billion NZD (March 2020)[2]
OwnerGovernment of New Zealand
ParentGuardians of the New Zealand Superannuation[3]
Subsidiaries
  • CNI Timber Operating Company[4]
  • NZSF Aotea[5]
Websitewww.nzsuperfund.nz

The New Zealand Superannuation Fund (Template:Lang-mi) is a sovereign wealth fund in New Zealand. New Zealand currently provides universal superannuation for people over 65 years of age and the purpose of the Fund is to partially pre-fund the future cost of the New Zealand Superannuation pension, which is expected to increase as a result of New Zealand's ageing population. The fund is a member of the International Forum of Sovereign Wealth Funds and is therefore signed up to the Santiago Principles on best practice in managing sovereign wealth funds.[6]

Foundation

The Superannuation Fund was created by the New Zealand Superannuation and Retirement Act 2001[7] on 11 October 2001 by Michael Cullen, who was then Minister of Finance under the Fifth Labour Government, and is colloquially known as the "Cullen Fund".[8]

The New Zealand Government had contributed $14.88b to the fund by 2012.[9] The sovereign fund posted a record 25.8% return in the twelve months till 30 June 2013.[10] In the 2009 New Zealand budget the National Government suspended payments to the fund.[11] Contributions were proposed to resume in 2020/21 when the Government's net debt to GDP falls below 20% again.[12] Instead, the new Labour-led government started payments into the superfund again in December 2017.[13]

Investments

A full list of investments for current and previous years can be seen at the Annual Equity Listing page at the NZ Super Fund's website.

LanzaTech

The Fund invested US$60 million into Chicago based LanzaTech in December 2014.

View | Dynamic Glass

During August 2015, The New Zealand Superannuation invested US$75 million into American-based electrochromic glass company View with a percentage owned not being released.[14]

Z Energy

The Fund has had a high profile in New Zealand after it and Infratil (a publicly listed New Zealand company) acquired Royal Dutch Shell's downstream assets in New Zealand, since renamed Z Energy.[15][16] The superannuation holds a 20% share in Z Energy.

Metlifecare Limited

New Zealand Super Fund hold a 19.93% share of Metlifecare Limited,[17] one of New Zealands largest retirement village providers. Metlifecare currently own and operate 25 retirement villages throughout the North Island.[18] Metlifecare is also dual listed as main components on both the NZX and ASX main boards. They are competitors to Ryman Healthcare.

Kaingaroa Timberlands Partnership

On Feb, 28th 2014, The Fund sold 2.5% of its stake in the Kaingaroa Timberlands Partnership to the Kakano Investment Limited Partnership, reducing its share from 41.25% to a 38.75% stake in the Kaingaroa partnership.

Other Investments

Other investments include a 7,943,351 share (0.71%) stake in partially state-owned and controlled (51.95% - state-owned portion) company Air New Zealand.[19] The Super Fund also holds a 37.59% stake in Datacom Group.[20]

Exclusions

The Superfund maintains a list of excluded companies similar to the Government Pension Fund of Norway.[21] The Superfund will not invest in the companies within the list.

The list includes,

Controversies

Banco Espirito Santo

In February 2015 the Superfund wrote off a $150 million loss in a Goldman Sachs organised loan to the Portuguese Banco Espirito Santo. The loss represented 0.7% of the total value of the Superfund's investment portfolio at that time.[23] Managers of the Superfund appeared before Parliament's commerce select committee on 26 February 2015 where they confirmed that legal action had been commenced against the Bank of Portugal to recover the lost money.[24]

Divestment

The Superfund's investment portfolio is the subject of ongoing debate. Labour Party MP David Shearer called in August 2014 for divestment from a company manufacturing white phosphorus which is used by the Israeli Defence Force as a weapon.[25]

In February 2015 Green Party MP Russel Norman called for the Superfund to divest $676 million from fossil fuel companies.[26]

In August 2017 the Superfund quit or reduced holdings in 300 fossil fuel companies, making 40% of all Superfund investments carbon neutral. Companies include: Exxon Mobil, Anadarko, Shell, BP, Statoil, New Zealand Oil & Gas, Genesis Energy, Alliant Energy, Berkshire Hathaway, Chevron, Rio Tinto, ConocoPhillips, Mitsubishi and Occidental Petroleum. Chief investment officer Matt Whineray stated, "We think that climate change represents a material risk, one that is not being properly priced by the markets."[27]

Fossil fuel divestment campaign organisation 350.org Aotearoa had been campaigning for the New Zealand Superfund to divest from fossil fuels for one year.[28] 350 Aotearoa and Greenpeace Aotearoa New Zealand supported the decision, calling it a "turning point for New Zealand."[29]

References

  1. ^ https://ar2018.nzsuperfund.nz/
  2. ^ https://nzsuperfund.nz/
  3. ^ "Guardians of New Zealand Superannuation: Governance and management of the New Zealand Superannuation Fund – Office of the Auditor-General New Zealand". Retrieved 2 December 2016.
  4. ^ https://www.business.govt.nz/companies/app/ui/pages/companies/1283385/shareholdings?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages%2Findividual%2Fsearch%3Fq%3DNew+Zealand+superannuation+%26start%3D%26entitySearch%3D%26addressKeyword%3D%26postalCode%3D%26country%3D%26addressType%3D%26advancedPanel%3Dtrue%26roleType%3DSHR%26indEntityTypes%3DALL%26indEntityStatusGroups%3DALL%26indDirStatus%3DALL%26sf%3D%26sd%3D
  5. ^ "Shareholdings". Retrieved 2 December 2016.
  6. ^ International Forum of Sovereign Wealth Funds. "IFSWF Our members". Archived from the original on 27 September 2016. Retrieved 24 September 2016.
  7. ^ "New Zealand Superannuation and Retirement Income Act 2001". 7 July 2010. Retrieved 12 May 2011.
  8. ^ "National's KiwiSaver and "Cullen Fund" policies". Chapman Tripp. 13 November 2008. Retrieved 12 May 2011.
  9. ^ "NZ Super Fund hits milestone". Fairfax Media. 18 October 2012. Retrieved 18 October 2012.
  10. ^ "New Zealand Superannuation Fund Posts Record 25.8% Return for 2012-2013". Sovereign Wealth Fund Institute. Retrieved 3 September 2014.
  11. ^ "CONTRIBUTIONS SUSPENSION", nzsuperfund.co.nz/
  12. ^ "Budget 2015 - Fiscal Strategy Report" (PDF). 21 May 2015. Archived from the original (PDF) on 22 May 2015.
  13. ^ "Jacinda Ardern and Grant Robertson restart Super Fund payments". 15 December 2017. Retrieved 9 May 2018.
  14. ^ "NZ Super Fund invests in US smart glass company". 13 August 2015. Retrieved 2 December 2016.
  15. ^ Bradley, Grant (18 November 2009). "Infratil 'likely' to seal deal with Shell". The New Zealand Herald. Retrieved 29 November 2009.
  16. ^ Bogoievski, Marko (3 November 2009). "Shell New Zealand Limited". NZX. Archived from the original on 3 June 2011. Retrieved 19 December 2010.
  17. ^ "Shareholdings". Retrieved 2 December 2016.
  18. ^ "Metlifecare - Investor Centre".
  19. ^ "Shareholdings".
  20. ^ "Shareholdings". Retrieved 2 December 2016.
  21. ^ "Companies excluded from the New Zealand Superannuation Fund as at 26 September 2014", nzsuperfund.co.nz/
  22. ^ "Automatic and semi-automatic weapon ban for NZ Super Fund". 12 April 2019.
  23. ^ "NZ Super Fund loses $200m after 'risk free' loan to Portuguese bank". The New Zealand Herald. 19 February 2015. Retrieved 23 March 2015.
  24. ^ "Super Fund confirms Portugal bank legal case". The New Zealand Herald. 27 February 2015. Retrieved 23 March 2015.
  25. ^ "NZ Super Fund has deadly portfolio". Sunday Star-Times. 3 August 2014. Retrieved 23 March 2015.
  26. ^ "Greens want NZ Super Fund to drop fossil fuels". Stuff.co.nz. 13 February 2015. Retrieved 23 March 2015.
  27. ^ "Superfund Sells Shares to Cut Climate Change Exposure". Radio-NZ. 15 August 2017. Retrieved 20 September 2017.
  28. ^ "Superfund Divestment shows real climate leadership". scoop.co.nz. 15 August 2017. Retrieved 20 September 2017.
  29. ^ "Super Fund's $950m fossil fuel divestment an "aha" moment for NZ economy". greenpeace.org/new-zealand/en. 15 August 2017. Retrieved 20 September 2017.
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