Fidelity Capital Partners has placed its first tranche of money raised via a wholesale fund built for the Active Investor Plus (AIP) visa market.
Billed as the “largest single investment made to date” under the revised AIP scheme, Fidelity has lent $57 million Transpower to help fund a range of renewal energy projects with a focus on battery storage, geothermal, solar and wind.
Eric Wei, Fidelity head of asset management, said the group has raised $90 million so far in the open-ended Sustainable Energy Fund built for the AIP market with further debt placements scheduled.
Transpower has more than $1 billion of capital expenditure lined-up for the near future.
Wei said as well as an ongoing relationship with Transpower, Fidelity was talking to other NZ electricity line companies that collectively require energy infrastructure funding in the order of $10 billion over the next five years.
“Energy independence isn’t a luxury anymore; it’s a necessity,” he said. “But that independence requires a level of capital that traditional sources can’t always cover alone.”
As well as meeting visa-seeker criteria, Wei said the Fidelity fund offers a “social impact” by helping fund sorely needed renewable energy infrastructure in NZ.
According to the group’s website, the Fidelity product “is designed to align with AIP applicants’ 3-year investment horizon, supporting capital preservation, redemption at maturity, and providing semi-annual cash distributions”.
Co-founded in 2020 by Wei and Adam Hunt (both former Financial Markets Authority staffers), Fidelity – not to be confused with insurer Fidelity Life or the other global investment-focused Fidelities – manages about $400 million separately for institutional clients and immigrants entering NZ under the pre-AIP visa scheme.
Fidelity is one of more than 60 products vying for wealthy immigrant money as an AIP-approved managed fund. Since the visa system was redesigned last year, the AIP market has attracted more than $3 billion of ‘commitments’ in total from 500 or so applicants.
Anecdotally, a handful of private credit vehicles have accrued much of the visa-linked investments.
Meanwhile, the recently rebooted Natural Hazards Fund (NHF) has formally opened up applications for potential third-party managers across four asset classes, comprising listed global shares, local government bonds, other fixed income and cash.
In a registration of interest (ROI) document published last week, the Natural Hazards Commission, formerly known as the Earthquake Commission, says the NHF will “diversify risk” across multiple third-party managers.
“No single organisation may comprise more than 50% of the Fund,” the ROI says.
The NHF, expected to allocation between $300 million to $400 million across selected managers by July this year, is open to both active and passive applicants in all asset classes – albeit with tracking error limits for actively managed candidates.
“Collective investment vehicles are preferred due to the current size of the Fund,” the ROI says. “However, segregated mandates may be considered for the Domestic Sovereign and Other Fixed Interest allocations.”
Registrations close on March 27 with short-listed candidates due to be notified by April 9 ahead of a request-for-proposal process and a July 1 start date for winning managers.
Overall, the NHF has grown to about $670 million following a gradual rebuild after the previous $6 billion Earthquake Commission disaster fund was drained to cover costs incurred in the 2010 Christchurch and 2016 Kaikōura quakes.
Melville Jessup Weaver (MJW) is independent investment adviser to the NHF.