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New Zealand Superannuation Fund

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New Zealand Superannuation Fund
Company typeState-owned
IndustryInstitutional investment (sovereign wealth fund)
Founded2001; 23 years ago (2001)
FounderMichael Cullen
Headquarters
Auckland
,
New Zealand
Key people
  • Nicola Willis - Minister of Finance
  • John Williamson - Chair of the Board
  • Jo Townsend - Chief Executive Officer
  • Stephen Gilmore - Chief Investment Officer
Increase NZ$4.0 billion (year to June 2018)[1]
Total assetsIncrease NZ$72.2 billion (February 2024)[2]
OwnerGovernment of New Zealand
ParentGuardians of New Zealand Superannuation[3]
Websitewww.nzsuperfund.nz

The New Zealand Superannuation Fund (Māori: Te Kaitiaki Tahua Penihana Kaumātua o Aotearoa) 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.[4]

Foundation

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The Superannuation Fund was created by the New Zealand Superannuation and Retirement Act 2001[5] 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".[6]

The sovereign fund posted a record 25.8% return in the twelve months till 30 June 2013.[7] In the 2009 New Zealand budget the National Government suspended payments to the fund.[8] Contributions were proposed to resume in 2020/21 when the Government's net debt to GDP was forecast to fall below 20% again.[9] Instead, the new Labour-led government started payments into the superfund again in December 2017.[10] The New Zealand Government had contributed $21.8 b to the fund as at 31 March 2022.[11]

NZ Super Fund announced a preferred partner agreement with the Māori Investment Fund in March 2018.[12]

Investments

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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

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The Fund invested US$60 million into Chicago based LanzaTech in December 2014. On March 8, 2022, LanzaTech announced its initial public offering through a special-purpose acquisition company in a deal that valued the company at $2.2 billion.[13]

View | Dynamic Glass

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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]

Kaingaroa Timberlands Partnership

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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

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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.[15] The Super Fund also holds a 37.59% stake in Datacom Group.[16] The Fund occasionally cooperates with outside companies to develop projects.[17]

Exclusions

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The Superfund maintains a list of excluded companies similar to the Government Pension Fund of Norway.[18] The Superfund will not invest in the companies within the list.

The list includes,

Controversies

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Banco Espirito Santo

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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

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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]

In August 2017 the Superfund quit or reduced holdings in 300 fossil fuel companies, making 40% of all Superfund investments carbon neutral. Companies include: ExxonMobil, 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."[24]

Fossil fuel divestment campaign organisation 350.org Aotearoa had been campaigning for the New Zealand Superfund to divest from fossil fuels for one year.[25] 350 Aotearoa and Greenpeace Aotearoa New Zealand supported the decision, calling it a "turning point for New Zealand."[26]

References

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  1. ^ "2018 New Zealand Superfund Annual Report". Archived from the original on 25 January 2019. Retrieved 11 October 2018.
  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. ^ International Forum of Sovereign Wealth Funds. "IFSWF Our members". Archived from the original on 27 September 2016. Retrieved 24 September 2016.
  5. ^ "New Zealand Superannuation and Retirement Income Act 2001". 7 July 2010. Retrieved 12 May 2011.
  6. ^ "National's KiwiSaver and "Cullen Fund" policies". Chapman Tripp. 13 November 2008. Retrieved 12 May 2011.
  7. ^ "New Zealand Superannuation Fund Posts Record 25.8% Return for 2012-2013". Sovereign Wealth Fund Institute. Retrieved 3 September 2014.
  8. ^ "CONTRIBUTIONS SUSPENSION" Archived 15 September 2014 at the Wayback Machine, nzsuperfund.co.nz/
  9. ^ "Budget 2015 - Fiscal Strategy Report" (PDF). 21 May 2015. Archived from the original (PDF) on 22 May 2015.
  10. ^ "Jacinda Ardern and Grant Robertson restart Super Fund payments". 15 December 2017. Retrieved 9 May 2018.
  11. ^ "NZ Super Fund Story". NZ Super Fund. 10 May 2022. Retrieved 10 May 2022.
  12. ^ "Te Pūia Tāpapa Fund and NZ Super Fund commit to preferred partner relationship". NZ Super Fund (Press release). 13 March 2018. Retrieved 15 December 2022.
  13. ^ Ramkumar, Amrith (8 March 2022). "WSJ News Exclusive | Carbon-Transformation Startup LanzaTech is Going Public in $2.2 Billion SPAC Deal". Wall Street Journal. ISSN 0099-9660. Retrieved 17 March 2022.
  14. ^ "NZ Super Fund invests in US smart glass company". 13 August 2015. Retrieved 2 December 2016.
  15. ^ "Shareholdings".
  16. ^ "Shareholdings". Retrieved 2 December 2016.
  17. ^ "New Zealand Sovereign Wealth Fund Forms Offshore Wind Partnership with CIP". Offshore Wind. 29 March 2022.
  18. ^ "Companies excluded from the New Zealand Superannuation Fund as at 26 September 2014", nzsuperfund.co.nz/
  19. ^ "Automatic and semi-automatic weapon ban for NZ Super Fund". 12 April 2019.
  20. ^ "NZ Super Fund loses $200m after 'risk free' loan to Portuguese bank". The New Zealand Herald. 19 February 2015. Retrieved 23 March 2015.
  21. ^ "Super Fund confirms Portugal bank legal case". The 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.
  24. ^ "Superfund Sells Shares to Cut Climate Change Exposure". Radio-NZ. 15 August 2017. Retrieved 20 September 2017.
  25. ^ "Superfund Divestment shows real climate leadership". scoop.co.nz. 15 August 2017. Retrieved 20 September 2017.
  26. ^ "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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