NZ Super Fund trims portfolio, sells 5 offshore private equity funds

Tuesday 10th May 2016

The New Zealand Superannuation Fund is selling investments in five offshore private equity real estate funds, adding to three such funds it sold in April.

The latest sale is of Orion European Real Estate Fund III, Mountgrange Real Estate Opportunity Fund, MoREOF (Parallel I) Unit Trust, Red Fort India Real Estate Fund II and Gateway Capital Real Estate Fund III. The buyer is Partners Group AG , a Swiss private markets investment manager with some 46 billion euros of assets under management. The sale price was confidential, the fund said in a statement.

Both the buyer and the value of the investments sold in April were kept confidential. That sale was of holdings in media and financial services investor Hellman & Friedman VII, US tech and health IT investor JMI Equity Fund VII and HIG Bayside Loan Opportunities Fund II, which invested in stressed and distressed senior debt obligations of US and European small cap companies. Those holdings were valued at $101 million in the fund's 2015 annual report.

“While private equity real estate has been a profitable part of the fund’s portfolio, these were relatively small investments and the move to sell them is consistent with our strategy to have fewer, deeper relationships with our investment managers,” said head of investments Fiona Mackenzie. None of the funds held New Zealand assets.

The Super Fund currently has investments of $29.6 billion, of which $4.2 billion, or 16 percent is in New Zealand investments. Its returns in the 12 months to March 31 was about 1.1 percent, compared to its long-term performance expectation of 5.55 percent. Its biggest exposure is to global equities, which account for 65 percent of its funds under management, followed by fixed income at 12 percent. Private equity amounted to 5 percent of FUM.

BusinessDesk.co.nz

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