Kiwi fund managers rescued by Super Fund

By Duncan Bridgeman

Friday 15th August 2003

Embattled fund managers received a much-needed shot in the arm yesterday despite a less-than-expected local allocation of the New Zealand Superannuation Fund.

The fund, set up to pre-fund government superannuation of the baby-boomer generation, got off to a poor start when strategy details were obtained through a premature release on the fund's website on Wednesday.

The fund's guardians confirmed yesterday the bulk of the investment would be offshore, with 67% invested in shares, 20% in fixed interest securities and 22% in New Zealand-based assets.

The initial $2.4 billion fund was forecast to be worth about $50 billion in 25 years' time.

Superannuation Fund chairman David May said the asset spread offered "the best opportunities for long-term growth without the need to take undue risk."

The 67% investment in equities reflected the fund's long-term investment horizon, he said. But only 7.5% was to be invested on the local sharemarket about half of what the Stock Exchange had hoped for.

Mr May said the size of the fund restricted its ability to invest a large portion in the local share market.

Overall, 13% of the fund will be invested in the local and international property markets, private equity and "growth assets. "

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