Australian-based infrastructure manager CP2 (formerly known as Capital Partners) has been dropped from the New Zealand Superannuation Fund (NZS) roster.
NZS would now manage in-house the approximately $370 million previously held by CP2 in two separate mandates in-house, a spokesperson for the fund said.
According to the NZS spokesperson, the move came after CP2 sold down its share of US toll road unlisted investment fund DRIVe to TransUrban in the last quarter of the financial year for US$145 million.
“The Fund’s share in the proceeds was USD34.34 million [about NZ$55 million],” the spokesperson said. “CP2 was also managing the Fund’s A$280 million [NZ$315 million] stake in Horizon Roads (Connect East), which manages Melbourne’s East Link toll road.”
NZS manages a number of investments in-house including some local equities and direct assets. For example, this August the fund took a US$75 million direct holding in US glass manufacturer, View, under its ‘expansion capital’ mission.
Similarly, NZS has invested directly into fuel cell manufacturer Bloom Energy, wind turbine developer Ogin and carbon recycling company LanzaTech.
In a speech to the NZ Shareholders Association last week, Fiona Mackenzie, said the NZS has a preference for “direct flexible access” to assets.
The NZS spokesperson said the most recent decision to bring global infrastructure investing in-house “is consistent with our preferred operating model of investing as directly as possible”.
Last week the fund also published its results for the 12 months to June 30 this year, reporting an after-costs, pre-NZ tax return of 14.64 per cent.
While NZS has experienced above-expectation returns over the last five years, Adrian Orr, chief executive, said the current period of volatility could prove challenging over the short term.
Global equity markets were off -6.49 per cent in August (outside the latest results period), which would affect NZS with its 80 per cent passive exposure to international shares.
“It is normal to see considerable volatility in our monthly and indeed annual returns,” Orr said in a statement. “We remain focused on our long-term strategies. As an agile and highly liquid investor, we are well positioned to manage short-term volatility, and will look to take advantage of market disruptions as they occur.”