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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
  • Bill English - Minister of Finance
  • Gavin Walker - Chairman of the Board
  • Adrian Orr - Chief Executive Office
  • Matt Whineray - Chief Investment Officer[1]
  • Cristina Billett - Legal Counsel
  • John Payne - Head of Tax
  • Mark Fennell - Head of Portfolio Completion
  • David Sara - Chief Operations Officer
  • Stewart Brooks - Chief Financial Officer
  • Sara Owen - Head of Corporate Affairs
  • Mika Austin - Head of Human Resources
Increase $2.74 Billion (Forecast to June 2016)[2]
Total assetsIncrease $29.8 Billion (December 2015)
OwnerGovernment of New Zealand
ParentGuardians of the New Zealand Superannuation[3]
Subsidiaries
  • CNI Timber Operating Company[4]
  • NZSF Aotea[5]
Websitewww.nzsuperfund.co.nz

The New Zealand Superannuation Fund 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 has contributed $14.88b to the fund to date.[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 current National Government suspended payments to the fund.[11] Contributions are expected to resume in 2020/21 when the Government's net debt to GDP falls below 20% again.[12]

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.[1]

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.[13][14] The superannuation holds a 20% share in Z Energy.

Metlifecare Limited

New Zealand Super Fund hold a 19.93% share of Metlifecare Limited,[15] one of New Zealands largest retirement village providers. Metlifecare currently own and operate 25 retirement villages throughout the North Island.[16] 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.[17] The Super Fund also holds a 37.59% stake in Datacom Group.[18]

Exclusions

The Superfund maintains a list of excluded companies similar to the Government Pension Fund of Norway.[19] 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.[20] 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.[21]

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.[22]

In February 2015 Green Party MP Russel Norman called for the Superfund to divest $676 million from fossil fuel companies.[23]

References

  1. ^ a b "NZ Super Fund invests in US smart glass company". Retrieved 2 December 2016.
  2. ^ https://www.nzsuperfund.co.nz/sites/default/files/documents-sys/NZ%20Super%20Fund%20Statement%20of%20Performance%20Expectations%202015-16.pdf
  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". 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.
  13. ^ Bradley, Grant (18 November 2009). "Infratil 'likely' to seal deal with Shell". New Zealand Herald. Retrieved 29 November 2009.
  14. ^ Bogoievski, Marko (3 November 2009). "Shell New Zealand Limited". NZX. Retrieved 19 December 2010.
  15. ^ "Shareholdings". Retrieved 2 December 2016.
  16. ^ http://www.metlifecare.co.nz/investor-centre
  17. ^ https://www.business.govt.nz/companies/app/ui/pages/companies/104799/shareholdings
  18. ^ "Shareholdings". Retrieved 2 December 2016.
  19. ^ "Companies excluded from the New Zealand Superannuation Fund as at 26 September 2014", nzsuperfund.co.nz/
  20. ^ "NZ Super Fund loses $200m after 'risk free' loan to Portuguese bank". New Zealand Herald. 19 February 2015. Retrieved 23 March 2015.
  21. ^ "Super Fund confirms Portugal bank legal case". New Zealand Herald. 27 February 2015. Retrieved 23 March 2015.
  22. ^ "NZ Super Fund has deadly portfolio". Sunday Star-Times. 3 August 2014. Retrieved 23 March 2015.
  23. ^ "Greens want NZ Super Fund to drop fossil fuels". Stuff.co.nz. 13 February 2015. Retrieved 23 March 2015.

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