The Government-owned New Zealand Superannuation Fund has booked a $112 million loss after giving up on its eight-year punt on fuel cell startup Bloom Energy.
Notes to the NZSF's annual report said US$100m ($143.7m) had been invested into the US-based company in 2013 and 2014, as part of a then-new foray into higher-risk expansion capital funding, but it had recently sold the entirety of its stake for US$21.51m.
"It is inevitable in such a big portfolio that some investments will underperform," the annual report said.
The fund's earlier investments had netted the NZSF a stake of around 5 per cent in Bloom, suggested shareholder valuation of the company was then around US$2b - but its 2018 IPO on the New York Exchange showed the firm had failed to develop significantly in the preceding years and it launched with a market valuation of only US$2.65b
Bloom never generated a profit, and it shares are now trading at only half the price of it post-IPO price peak of US$34, and late last year tracking under US$3.
A Forbes investigation into the company earlier this year said Bloom had failed - despite growing favour for clean and alternative energy - as its energy was "too dirty and too costly".
Its flagship "Bloom Boxes" - which generated power from solid oxide fuel cells using an electrochemical process - were 40 per cent more expensive than power from the US national grid, and were picked up by only commercial or industrial businesses requiring a backup form of generation.
Early claims by the company that its power produced less greenhouse gas emissions also came in for scrutiny by Forbes, who noted the boxes degraded over time, becoming less effective, and years on were producing emissions no better or worse than the national average.
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A spokesperson for the NZSF drew attention to the scale of the fund - it was not worth around $50 billion, and its diversified approach had included many investments which performed much better than Bloom.
Since its inception in 2003 the NZSF has achieved returns, intended to help the Government defray the costs of providing retirement income to an ageing population, of a very healthy 9.69 per cent.
"The enhanced return is achieved by taking on additional risk, including from undertaking direct investments and in expansion capital opportunities. Investments in early stage companies will not always be successful but they are an appropriate part of the mix for a long-term, diversified investor seeking to maximise returns," the spokesperson said.
The spokesman defended the fund's foray into direct investing, noting the strategy was also responsible for its acquisition, and subsequent float, of Z Energy in 2013 - a move which generated more than $1.1b for the fund after an initial outlay of just $209.8m.
In 2016 the NZSF had to write down US$37.8 invested three years earlier - part of the same foundation class of capital expansion funding that included Bloom - into wind-turbine company Ogin after the company hit the wall and was unable to convince investors to fund its development any further.