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Kiwi fund managers rescued by Super Fund

By Duncan Bridgeman

Friday 15th August 2003

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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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