Super Fund ups investments
The New Zealand Super Fund has about $2.5 billion invested in New Zealand primary industries and is keen to add more to its portfolio.
Its latest investment is in international grower and marketer NZ Gourmet, taking a 27 per cent stake in the company for an undisclosed price.
NZ Gourmet produces and markets high-quality fresh produce including capsicums, blueberries, asparagus, tomatoes, strawberries and cherries. It is one of the largest fresh blueberry exporters and capsicum producers in New Zealand. NZ Gourmet and its US subsidiary, Gourmet Trading, supply leading retailers in North America, Asia and Australasia.
The company will use the new capital to support growth and expansion domestically and offshore.
Although just 6.4 per cent of the Super Fund’s total global investment is in local agribusinesses, they make up half the amount it has invested in New Zealand.
Head of New Zealand direct investment Will Goodwin said while many Kiwi agribusinesses would never offer the same returns as more speculative ones, they returned ‘‘a mid to high single digit figure’’. That compares with 10.4 per cent a year the fund has returned since it was launched in 2003.
‘‘Part of our strategy is anchored on the fact that over the long term the value accrues back to the land holder . . . and that’s where we think we’ve got the best ability to support the sector.’’
‘‘As soon as you start investing downstream into the brands and the marketing, you’re not getting the true rural exposure,’’ Goodwin said.
Different agribusiness investments offered different returns. ‘‘Expansion capital’’ investments into Rockit Apples and Waikato Milking Systems through managers Direct Capital and Pioneer have generated 14.7 per cent a year since inception.
‘‘These are higher risk and potential higher return investments. Others like farmland and timber are seen as diversifiers away from equity market risk, and lower long-term returns are expected.’’
Standouts include its 42 per cent stake in Kaingaroa Timberlands and its portfolio of 22 dairy farms.
It also has equity holdings in a number of listed companies such as NZ King Salmon (about 6.5 per cent), and exposure to small-medium sized companies through its expansion capital investments. Earlier this year, the fund also bought two beef farms and a vineyard in New Zealand.
Goodwin emphasised the fund’s sole mandate was to maximise returns, not to fulfil Government objectives.