New Zealand Superannuation Fund

New Zealand Superannuation Fund

Type	Sovereign wealth fund
Industry	Institutional Investment
Founded	2001 (2001)
Founder	Michael 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
Operating income	$2.74 Billion (Forecast to June 2016)[2]
Total assets	$29.8 Billion (December 2015)
Owner	Government of New Zealand
Parent	Guardians of the New Zealand Superannuation[3]
Subsidiaries	CNI Timber Operating Company[4] NZSF Aotea[5]
Website	www.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,

• Companies in the tobacco industry;
• Companies involved in the production of nuclear weapons, cluster munitions and anti-personnel mines;
• Companies involved in the Grasberg mine in West Papua;
• Companies involved in the processing of whale meat;
• Tokyo Electric Power Company;
• Companies involved in developing settlements in the Israeli-occupied territories.

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

External links

• Official website
• New Zealand Superannuation and Retirement Income Act 2001 on the New Zealand Legislation website.