WELLINGTON, March 21 New Zealand's
Superannuation Fund on Friday said it would invest $250 million
in North American gas and oil investments run by global private
equity firm KKR & Co LP, tripling its investment in the
company as the state pension fund increases its exposure to
The $21 billion pension fund will invest up to $175 million
over the next 3-5 years in natural gas exploration and
production projects in North America along with energy
infrastructure and services, it said in a statement. The
remainder would be invested into KKR's new Energy Income and
Growth Fund, which focuses on unconventional gas and oil
Combined with its investments in KKR's Asian Fund and its
2006 Fund, the Superfund's latest investment brings its total
planned investments in KKR to around $335 million.
Set up in 2003 to partially fund the cost of future pension
payments for New Zealand's 4.5 million people, the Superfund has
invested in private equity since 2005. The latest chunk will
boost the fund's private equity investments from around 3
percent of its total portfolio at the moment.
Matt Whineray, general manager of investments at the fund,
said the new investment would increase its exposure to the
energy sector, adding that the fund hoped to capitalise on the
rapid development of natural gas and unconventional oil assets,
and offer other benefits.
"These benefits include improved expected returns,
resilience in relation to a rapidly changing sector and greater
insight into, and control over, our investment exposures,"
Whineray said in a statement.
"Our focus on responsible investment will also be bolstered
by KKR's expertise in the management of environmental, social
and governance factors."
When fully funded, the new investment will increase the
fund's energy sector investments to around 11 percent of its
total portfolio from 10 percent at the moment. This would take
energy holdings back to levels seen in mid-2013, before the fund
sold down some of its stake in New Zealand petrol retailer Z
Friday's announcement expands the Superfund's investments in
the U.S. energy sector, and follows a $100 million investment in
Bloom Energy, which uses solid oxide fuel cell technology to
create power, and $55 million in wind turbine manufacturer Ogin.
The Superfund has a mandate to offer returns at least 2.5
percent on average above the risk-free 90-day New Zealand
Treasury bills. Since its launch, the fund has made annual
returns of 9.6 percent.
KKR's primary activity involves buying businesses using
borrowed money. It gained widespread recognition through its $25
billion leveraged buyout of RJR Nabisco in 1988, a battle that
was immortalized in the bestseller, "Barbarians at the Gate".
($1 = 1.1713 New Zealand Dollars)
(Reporting by Naomi Tajitsu; Editing by Shri Navaratnam)