Inside Money

Business writer David Chaplin blogs on personal finance

Inside Money: Mandate update - the expanding NZ Super universe

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Is the NZSF investment mandate now extending into space? Image / Thinkstock
Is the NZSF investment mandate now extending into space? Image / Thinkstock

The New Zealand Superannuation Fund (NZSF) has evolved into a complex beast, managing almost $20 billion across a great diversity of assets. With 70-odd people under its employ, the NZSF is also probably the country's most-staffed fund manager - it's certainly carries much higher personnel costs than the Accident Compensation Commission (ACC) investment fund, which manages a similar lump of our money.

The NZSF, however, has a freer rein than the ACC fund to explore sophisticated investment strategies in exotic zones and it's done so enthusiastically.

At the latest count the NZSF has 44 external fund managers on its books, running mandates of various sizes in almost every asset class you can think of.

Recently, the NZSF promoted its head of communications, Paul Gregory, to the newly-created role of analyst manager monitoring to help streamline the information flow between the fund and its multitudinous mandates.

Of the 44 underlying NZSF managers very few would be names recognisable to the retail hoi-polloi as most of them operate in the higher institutional plane where deals are struck in multiples of 10s or 100s of millions.

While the NZSF doesn't exactly keep its mandates secret, new appointments do sometimes sneak into the list unannounced.

Last year, for example the NZSF appeared to have a thing for global property, which included investments in:

Red Fort India Real Estate Fund II, managed by Red Fort Capital, a company renown (in certain circles) for "leveraging their transaction structuring, execution and asset management expertise to underwrite downside-protected investments in real estate in India.";

Sveafastigheter Fund III, a fund run by Swedish firm Sveafastigheter AB, which, the blurb describes "will invest in real estate assets across all property segments within the pan-Nordic region, primarily Sweden and Finland.";

Mountgrange Real Estate Operating Fund (MoREOF), a product offered by London-based firm Mountgrange Investment Management that specialises in UK commercial property.

But there's plenty of other wonderfully-named managers who are relative new-comers to the NZSF like Astorg Partners, Gaw Capital and Gladius Investment Management.

The latest manager to meet with NZSF approval is Apollo Global Management. In February this year, the NZSF agreed to invest an undisclosed amount in the Apollo Financial Credit Opportunities I, LP, "which invests in US life settlements [as mentioned in previous blogs] - in particular those acquired from other investors".

For all I know, in a post-Apollo move the NZSF may also be in talks with James Cameron and that Google guy about its next investment, putting a mandate on the moon.

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