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It's taken three months, but KiwiSaver cash is now trickling into the hands of fund managers keen to start investing a new stream of New Zealanders' retirement savings.
And it couldn't come at a better time, with several recent share market floats postponed because of turbulent world markets.
The fund managers estimate that between $100 million and $150m of KiwiSaver money will find its way on to the New Zealand Stock Exchange in the first year, growing strongly in following years. And up to $30m of this will be invested in the next few weeks.
Money deposited into KiwiSaver for the past three months, and until now looked after by IRD, is coming into the funds managed by the Kiwi-Saver providers.
This means they can start using it to buy shares, bonds or property, both locally and internationally.
The initial trickle of funds is not enough to shift the market dramatically, but fund managers know that the trickle won't be drying up anytime soon, and should keep growing in the years to come.
Finance Minister Michael Cullen, father of KiwiSaver, will this week reveal how many people have signed up to the Government-sponsored scheme. He has staked a lot on its success, even diverting money from personal tax cuts to boost individual KiwiSaver funds.
In late August, Cullen announced nearly 130,000 people had joined KiwiSaver. Of those people, 61,061 had chosen a provider and gone directly to a scheme to enrol. Another 51,139 had enrolled via their employer and 17,391 were new employees, who were automatically enrolled by their employer.
Mark Weldon, chief executive of the NZX, says recent planned initial public offerings (IPOs) were postponed not because of any lack of confidence in the health of the market or the quality of the companies.
Rather, turbulent credit markets have made it difficult to put an accurate price on the IPOs - but things are now looking more stable.
"There are a couple of IPOs that we are aware of for the last quarter of this year," says Weldon. "Indications of interest are pretty strong, and [they are] not necessarily companies you would think of as as blue chips, more growth companies."
The recent "re-pricing" in global credit markets has been good for equities - since companies now find it cheaper to issue shares than to borrow debt.
"In the medium term, this is very healthy for capital raising and the New Zealand market," says Weldon.
He describes the new KiwiSaver money, while not yet enough to move the market, as "a continual tap".
"It's really, really healthy. Cheap debt is the enemy of equity raising, so [now that] debt has been finally re-priced to fair levels around the world, demand will come back to equity."
There has been a clear change away from junk debt towards quality bonds, says Weldon, and liquidity is back in the market. "It's looking pretty good."
Philip Houghton-Brown, chief investment officer at ING NZ, thinks there will be $100m-$150m of KiwiSaver money coming into New Zealand shares in the first 12 months of the scheme.
"That will rise quite materially - so in three years' time we could be seeing more like $300m per annum, rising up from there as well," he says.
But any shareholders expecting a quick jump in share prices now KiwiSaver money is flowing into the NZX may be disappointed, with the amount of money unlikely to make too much of a difference.
"We don't see it's something that's going to move the market, but it's an added positive dynamic where that flow didn't exist before," says Houghton-Brown.
One thing that has made a big difference with the KiwiSaver inflows is the fact they will keep coming in, year after year.
"While you look at whatever the number is in the first year, you can see that next year will be bigger," he says.
"And next year will be bigger than that. And that will be the big difference."
In the past there had been no sustained growth - some years were good, then there were poor years.
"Generally, on average, it's been fairly low growth. That will be the big difference."
Houghton-Brown says he'd like to see more IPOs coming to the market, increasing the range of companies for investors to choose from.
And even without IPOs, there are still some good investments to be made in New Zealand equities.
"While the overall market may be trading at higher-than-usual multiples, there are still plenty of companies that still look reasonably attractive to us," he says.
"You can still always find something that is good value. You don't have to rely on new IPOs to find that value."
While long-term investments, such as in infrastructure, tend to suit these kind of long-terms funds, it is also important to look for growth.
"So while those have the benefit of being stable cash flows... you're also looking for those growth opportunities that provide a good balance in the portfolio," he says.
Fund managers will not be rushing to buy high-priced assets, though.
"People will be saving a certain amount each year," says Houghton-Brown.
"You don't want values to be pushed up to unreasonable levels in year one. It makes it more expensive to buy it in year two.
"The funds have a wide enough range of assets and wide enough discretion to allocate between asset classes and to not allocate if an asset becomes too expensive."
AMP Investors head of strategy Leo Krippner believes the introduction of KiwiSaver should increase the quality of investments available in new Zealand, and help to support new capital raising on the NZX.
AMP looks after $12.5 billion of investors' money and its KiwiSaver growth fund will have about 25 per cent in New Zealand equities - although some of this could include Australian shares.
Its balanced fund will have 15 per cent local shares and its most conservative "default" fund will have about 5 per cent local shares.
"In terms of the IPOs, I do think KiwiSaver will stimulate that," says Krippner. "When the new money comes in the choice is whether to put the new money into listed New Zealand equities. We've got a view that the New Zealand market is probably slightly over-valued at the moment."
AMP does not have a negative view of local equities, he says, it is just more positive about global ones.
Investing in New Zealand may instead come through new IPOs.
"I think KiwiSaver will provide the incentive for new IPOs. The money that is coming in through KiwiSaver is money that is long-term capital," he says.
"Because we know it is being invested now, and won't be taken out until the people hit 65, it enables us to take a longer-term view on things."
Some of the best returns could come from assets with a longer pay-off structure.
"[KiwiSaver] will introduce this new, long-term pool of capital that wasn't previously available," says Krippner. "I think that will open up new investment opportunities, so long as projects with those longer investing horizons are available."
In the past, the only people with this kind of long-term capital to invest have been from overseas or the Government.
"As an asset allocator, we've always had an allocation to less liquid assets like New Zealand property, and we've always been looking for infrastructure investments," says Krippner. "But we've limited allocation to those less liquid assets, because we've never known when people will come wanting their money back."
People are not going to be "demanding their money back" for much longer, making it safer to buy less liquid assets, which often carry a premium.
Factfile
* Money invested in KiwiSaver is being paid out to the various fund managers.
* They estimate an extra $100-$150 million will now be invested in the New Zealand stock exchange.
* Fund managers say the long- term nature of the KiwiSaver money will make it easy to invest in different types of long-term assets.
* Finance Minister Michael Cullen is due to reveal latest KiwiSaver numbers this week.
* Recent initial public offerings (IPOs) on the NZX have been delayed due to uncertainty.
* NZX chief executive Mark Weldon says that some of the future IPOs have been getting strong interest.
