Now this is a merger: NZ mulls mega-fund

The New Zealand government could create a single NZ$40 billion ($30 billion) fund under a proposal mooted in its inaugural ‘Investment Statement’ published this month.

If adopted, the proposal – classified as one of the “high level choices in the financial portfolio” – would impose a central investment structure across all Crown Financial Institutions (CFI), which include the $13 billion New Zealand Superannuation Fund and the $9.7 billion Accident Compensation Corporation (ACC) fund.

“At present the five CFIs are separate entities,” the government Investment Statement says. “A single fund manager across CFIs might increase efficiency and overall performance, and enable better aggregate risk management across the financial portfolio.”

As well as the ACC and NZ Super funds, CFIs also include the $4.5 billion Earthquake Corporation (EQC) fund and the $2.2 billion Government Superannuation Fund (GSF).

While classed as a CFI, the $1.35 billion National Provident Fund manages the private savings of individuals across several industry groups and falls under the government purview because it carries a Crown guarantee.

A spokesperson for the office of Finance Minister Bill English said the options included in the Investment Statement represented an “initial stocktake” of Crown assets and were not government policy.

Sponsored Content

“No decisions have been made or any in-depth analysis of the pros and cons [of creating a single CFI fund] has been carried out,” the spokesperson said.

Paul Dyer, economic adviser to Bill English, formerly held high-level investment positions at both NZ Super and the ACC fund.

The Investment Statement, also reveals the government would review the size and asset mix of the EQC fund (officially called the National Disaster Fund or NDF) following the massive earthquake that hit Christchurch this September.

“Both issues will need to be reassessed in the light of the Canterbury earthquake, which is likely to result in payments from the NDF of up to $1.1 billion,” the Investment Statement says.

Leave a Comment

Sort content by

Cost saving on radar for Canada’s PSP as more assets come inhouse

The C$41 billion ($38 billion) Public Sector Pension Investment Board plans to bring more assets in house in a bid to lower costs, and will increase the number of direct investments to increase control, the chair Paul Cantor said at the annual public meeting. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

CalPERS, CalSTRS collaborate to build board nomination list

CalPERS and CalSTRS have collaborated to build a network of more than 150 individuals from a diverse pool of sources to act as potential candidates for nomination to corporate boards, as CalPERS’ consultant advises it to synchronise proxy votes between internal and external portfolios. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

CalPERS’ infrastructure consultant cuts fees

CalPERS has appointed a lead infrastructure consultant from its list of four shortlisted candidates that included Meketa Investment Group, Pension Consulting Alliance, RV Kuhns and Wilshire, with the appointed consultant offering a reduced fee structure as part of its contract. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Alaska fills special opportunities bucket with real return mandates

The Alaska Permanent Fund will appoint four real return managers in March next year to manage a total of $2 billion in mandates that will have very few restrictions, and has shortlisted five managers to fill the brief, as part of its special opportunities bucket that makes up 21 per cent of the total fund.

Performance attribution using a decision hierarchy approach

The increasingly dynamic nature of asset allocation and the combination of internal and external management within pension funds requires a performance evaluation model for deeper insight of the organisation’s results. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Euro funds think global as risk appetite returns

Investment appetite among European institutions rebounded in 2009, with Mercer Investment Consulting identifying a surge in clients’ demands for new global fixed income, global equity and specialist credit exposures. Andy Barber, global head of manager research at Mercer, tells Simon Mumme about the investment themes driving these searches, and the evident decline of the ‘home

Previous