The NZ Super Fund confirmed today that it had submitted an unsolicited proposal to the Government offering to assess the viability of the Auckland Light Rail Project for commercial investment.

Acting Chief Executive Matt Whineray said: "The Government has signalled its intention to accelerate core infrastructure investment in a number of areas. We consider the Auckland Light Rail network to be an infrastructure project of sufficient scale and significance to be an attractive prospect for investment. We wish to explore whether a NZ Super Fund-led consortium leveraging our international relationships can fund and deliver the project, on a fully commercial basis."

The NZ Super Fund has identified as its potential partner CDPQ Infra, a wholly owned subsidiary of Caisse de dépôt et placement du Québec (CDPQ) responsible for developing and operating infrastructure projects. CDPQ is one of Canada's leading institutional fund managers with USD238.2 billion in net assets, and has extensive experience in infrastructure development and investment globally. CDPQ Infra is responsible for developing, building and operating Montreal's 67-km light rail network. Other members could potentially be added to the consortium.

The NZ Super Fund understands and respects the Government's need to run a procurement process and looks forward to further engagement with the NZ Transport Agency.

It's been a week since I wrote something for this blog. I've been shifting house and all that entails- what a performance. I've also managed to put out one press release, on a new data company in New Zealand that focuses on insurance. The release is attached with a few bits added, such as the exciting times had by the executives in Las Vegas.

Press Release

 Vallum on road to international expansion

 26 March 2018, New Zealand New Zealand InsurTech start-up, Vallum, was one of 25 international early-stage businesses chosen to pitch at the Global InsurTech Roadshow, which was held in Frankfurt, Germany earlier this month.

 The prestigious Goethe Business School organised the event in cooperation with InsurTech Asia.

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."

hThese articles recently appeared in FDI magazine.

Lucia Dore | 14/12/2017 12:02 pm |

https://www.fdiintelligence.com/Locations/Asia-Pacific/New-Zealand/Has-FDI-fallen-out-of-favour-in-New-Zealand

Observers fear New Zealand’s historic openness to foreign investors could be a thing of the past under new prime minister Jacinda Ardern, with property speculation coming under increased scrutiny. Lucia Dore reports.

For the most part, New Zealand has had an open and welcoming attitude towards FDI over the years, and has recognised the positive contribution that foreign investors have made to the country. However, this may be about to change. 

These articles recently appeared in FDI magazine.

Lucia Dore | 14/12/2017 12:02 pm |

https://www.fdiintelligence.com/Locations/Asia-Pacific/New-Zealand/Has-FDI-fallen-out-of-favour-in-New-Zealand

Observers fear New Zealand’s historic openness to foreign investors could be a thing of the past under new prime minister Jacinda Ardern, with property speculation coming under increased scrutiny. Lucia Dore reports.

For the most part, New Zealand has had an open and welcoming attitude towards FDI over the years, and has recognised the positive contribution that foreign investors have made to the country. However, this may be about to change. 

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.

News of the private equity firm, Gaw Capital Partners, keeps coming. But I guess that's what happens in the fast growing Chinese market.  And real estate is often the asset of choice.

November 28, 2017, Hong Kong – Real estate private equity firm Gaw Capital Partners today announced that the firm, through a fund under its management, and consortium partners, including Goldman Sachs, have won a bid to acquire a retail portfolio comprising 17 shopping centers in Hong Kong from Link Asset Management Limited at HK$ 23 billion and an average price of around HK$7,922 per sq. ft. excluding parking.

The portfolio is comprised of a number of strategically-located properties across Kowloon and the New Territories that sit in the heart of densely-populated communities and in close proximity to MTR stations. The GFA of the portfolio totals 2.2 million sq. ft. of prime retail space and comes with over 8,000 parking spaces that are connected to highly-convenient transport links. Their excellent accessibility and holistic shopping environments have made them attractive destinations for retailers and hubs of community life for residents.

The shopping centers included in the portfolio are: Cheung Hang Shopping Centre, Kai Yip Commercial Centre, Kam Tai Shopping Centre, Lei Cheng Uk Shopping Centre, On Ting Commercial Complex, Shek Lei Shopping Centre I & II, Tai Wo Hau Commercial Centre, Tsz Ching Shopping Centre, Yau Oi Commercial Centre and Yung Shing Shopping Centre, Kwai Fong Plaza, Kwai Shing East Shopping Centre, Lai Kok Shopping Centre, Lee On Shopping Centre, Retail and Car Park within Shun Tin Estate, Tsing Yi Commercial Complex and Lions Rise Mall.

Goodwin Gaw, Chairman and Managing Principal of Gaw Capital Partners, said, “We and our partners strongly believe in Hong Kong’s future, and believe these malls, which Link REIT has done an excellent job in upgrading and maintaining, will continue to serve important functions in the community. We hope to utilize our experience to evolve these malls into refreshed and renewed centers of local life. To be successful, we will need the support of the community, and we look forward to working with them to understand the gaps that could be filled and how we can support them to make their neighborhoods better homes.

Recently I went to a talk by Dr Sandhya Ramrakha on the internationally recognised Dunedin Study- the longest multi-disciplinary, longitudinal study in the world, which is carried out by Otago University. It is known formally as the Dunedin Multidisciplinary Health and Development Research Unit (DMHDRU). The study tracks the lives of about 1000 babies born in Dunedin between 1972 and 1973. Now in its 45th year, the study is ramping up, particularly as people are beginning to age.

 Since most ageing research is done on the elderly, little is known about biological aging in young humans. The study aims to fill this gap.

 “We know that the aging process starts right from the beginning of life and our people are at a critical point in their life course. They’ve now reached the point where they are starting to go down the aging pathway. We want to figure out what lies ahead, because this is one race you don’t won’t to win,” the October 17 magazine of the University of Otago states.

 This year the study has also re-introduced studies of hearing and sight, not done since childhood; muscolosketal health, including pain and body composition; dietary biomarkets; investigative oxidative stress cellular health and chronic kidney injury; and brain imaging research.

 Other aims of the study include understanding the reasons for people’s behaviour over time. It is used to inform health, education and social policy in particular. For example, it also presents new findings on domestic violence that shows that women are just as likely to commit domestic violence offences as men. http://www.stuff.co.nz/timaru-herald/news/81025573/domestic-violence-study-presents-challenging-picture

Maori Iwi have come together to form a NZD 100 million fund, so that they can each make more and better investments. Here is the press release.

Indicative commitments of up to $100 million have been made by iwi, pan-tribal organisations, Māori land trusts and Māori incorporations to a proposed Iwi/Māori Direct Investment Fund.

The Fund, which will help the Māori groups further diversify their portfolios and access larger scale direct investment opportunities than they can achieve on an individual basis, will see the groups pooling capital for collective investments. Iwi and Māori groups have an increasing economic base, with potential to grow land, capability and capital. 

Over 35 Māori groups have made indicative commitments to the Fund and are now working together to finalise legal documentation and internal governance approvals.  Organisations that have made indicative commitments to the Fund include various Tūwharetoa organisations aggregating together as a single investor, Te Tumu Paeroa, and various Taranaki iwi entities.

The New Zealand Superannuation Fund is performing remarkably well, at 14.6 per cent, in a low interest environment, globally. As outlined in its annual report the fund has invested heavily in New Zealand, which is not a large market. This report, and foreword by Adrian Orr, CEO, explains the basis of the fund's performance.

Kia ora,

I'm delighted to present the 2017 Annual Report of the Guardians of New Zealand Superannuation and the New Zealand Superannuation Fund.

This year's Annual Report has the theme "Invested in New Zealand and the world – Kaingākau ana ki Aotearoa me te ao".

The Fund is a significant investor in New Zealand with nearly $5 billion invested locally. We also invest around the world in order to diversify the Fund and get the best long-term investment returns for New Zealanders.

PLEASE NOTE THAT THIS CONFERENCE HAS BEEN POSTPONED. DATE HAS STILL TO BE ARRANGED. COMMUNITY EVENT WILL BE ON 4 NOVEMBER AR SAME LOCATION. IT WILL BE IN AMHARIC ONLY.

Ethiopia is much more than adventure tourism and tourist sights. The politics and economics of the country are fascinating too. For example, some Ethiopians who come to New Zealand as refugees are from the same tribe as the ruling party, (the Tigrayan People's Liberation Front (TPLF)) and work as undercover spies, keeping tabs on Ethiopians in this country.

To keep abreast of these issues and as well as those regarding social media and telecommunications, which are prohibited in the country, a conference will be held in Auckland on October 27.

It is designed to create awareness among New Zealand officialdom of the issues affecting the Ethiopian community and allow it to share its concern with members of the local community.

The conference will be held between 9am and 11am at the University of Auckland, 74 Epsom Ave, Auckland, Room 6EA-201A.

I've covered a lot of private equity over the years, especially in the Middle East where I was based for 8.5 years. In New Zealand, the private equity market is dominated by a few companies and the country's sovereign wealth fund, NZ Super, has a key place in particular. It has performed well. Here are the latest results.

The NZ Super Fund has enjoyed one of its best annual performances yet, turning in a 20.7% (after costs, before NZ tax) return for the 12 months to 30 June 2017. It finished the year at $35 billion, up $5 billion on the year before.

Chair Catherine Savage said: "The Fund is generating world class returns and creating significant wealth for New Zealanders on a sustained basis. It should not, however, be measured on its short-term returns. We are here to create long-term value for New Zealand taxpayers.  The Fund has now returned 10.2% p.a., more than double the cost to the Government of contributing to it,*  over a period of nearly 14 years."

The 20.7% annual result reflects a sustained rally in global equity markets, and resulted in the Fund paying a record high $1.2 billion in New Zealand income tax for the financial year.

Ms Savage said the Fund's active investment strategies had performed strongly during the year, adding value of 4.4% ($1.3 billion) over the Fund's passive benchmark. "Over the long term we expect to beat the passive benchmark by 1% p.a., so this has been an excellent year."

Refugees and other marginalised people often find it very hard to find work. But this is only one of the many obstacles that they  must overcome. The article below about an asylum seeker in New Zealand tells a story that is all too common. It will be published within a larger volume of research that is being undertaken with the Canterbury Refugee Resettlement and Resource Centre (CRRRC).

Anti-Muslim comments are becoming increasingly common all over the world. We have a great deal of anti-Muslim rhetoric from the US President, Donald Trump, who portrays all Muslims as terrorists; there is similar rhetoric emanating from the UK.

In New Zealand, we have a professor from Waikato University who, on Facebook, suggested that hiring Muslims was a poor move because of their prayer schedule. They pray five times a day, three of which are generally early in the morning and late at night.

I’ve spent a lot of time following, and writing, about private equity. It was especially important to do this when I was focused on mergers and acquisitions in the Middle East. Now that I’m back in New Zealand I follow what is going on here, although the market is necessarily much smaller. Below is an update on New Zealand’s Super Fund, NZ’s sovereign wealth fund, and how it has performed on the world stage.

Governor of the Reserve Bank of New Zealand, Graeme Wheeler, confirmed that interest rates would remain low for the “foreseeable future”. He was speaking at a business lunch in Queenstown on Friday 2 June.

“I don’t think we will see high inflation in the global economy for a long time,” he said, noting that the Reserve Bank had cut interest rates seven times since mid-2015.

 Interest rates in New Zealand stand at an historic low. While mortgage interest rates are about 2.2 per cent the official cash rate is 1.75 per cent. This is high when compared to Europe, which is about 0.5 per cent or less, Wheeler said.

New Zealand finance Minister, Steven Joyce, confirmed his reluctance to impose a visitor levy on tourists because visitor numbers may not remain at the current level, he said. He was speaking at a lunch on April 28 2017, hosted by the Queenstown Chamber of Commerce.

 He noted that tourist numbers in New Zealand were only a small percentage of tourist numbers worldwide - although they might seem big to us.

 However, it was important for the government to invest in infrastructure, to make things happen, he said, particularly in a place like Queenstown given that it is a tourist mecca.

 He also spoke about the need to mobilise private capital and utilise that when necessary.

 At the end of April, Joyce announced that he would be allocating $11 billion over the next four years to infrastructure in the May Budget, up from $4 billion. Some of these projects are already underway such as the Kapiti Expressway and the new City Rail Link (CRL) in Auckland.

It’s good to know that the organisation for New Zealand’s Techweek ‘17, which will run from 6-14 May 2017 is moving ahead. A week of events bringing together bright minds to tackle global issues with local ingenuity. Head to Techweek‘17 to meet like-minded people, discover new opportunities, and learn about the latest and most exciting technologies that are changing the shape of the near future, according to Techweek’s website.

by Lucia Dore

On a road show around New Zealand are Sir Geoffrey Palmer, law professor and former prime minister, and Andrew Butler, a litigator at Russell McVeagh in Wellington, New Zealand. They are promoting their book: “A constitution for Aotearoa New Zealand” and are asking people for their views on the points they have laid down for a otential written constitution.