Big KiwiSaver providers set to take Mighty River plunge

Mighty River Power is expected to become one of the NZX 50's 10 biggest companies once it lists. Photo / Brett Phibbs

Some of the largest KiwiSaver providers are already committed to buying shares in the soon to be floated energy company Mighty River Power.

ASB, Westpac and Fisher Funds - which control more than 40 per cent of the $15.4 billion invested in KiwiSaver - all say they will buy shares in the company.

Blair Turnbull, general manager wealth and insurance at ASB, said its KiwiSaver scheme used an index-tracking approach which followed the NZX 50 Index.

"Given the expected size of the issue, we anticipate that MRP will enter the NZX 50 index as soon as the NZX index rules allow. The ASB KiwiSaver scheme will participate as a consequence," Turnbull said.

Mighty River Power is expected to become one of the exchange's 10 largest companies once it lists.

A spokesman for Westpac said it expected Mighty River Power to have an initial index weighting of about 3.5 per cent to 4 per cent resulting in around 0.6 per cent of its KiwiSaver money going into the company.

"The implementation of the Government's mixed-ownership model certainly provides us with a number of interesting investment opportunities and our funds will certainly participate in this process to varying degrees," he said.

"At the end of the day though, our decision on how fully we participate will come down to whether these are attractive long-term investments for our customers."

Fisher Funds managing director Carmel Fisher said she expected to buy Mighty River Power shares for both its KiwiSaver conservative and growth funds and would also invest in them for its property and infrastructure fund. "The holding will be part of a diversified portfolio so a KiwiSaver member may end up with an exposure to MRP in the order of 0.5 per cent to 1 per cent of total assets."

The largest KiwiSaver provider, ANZ-owned OnePath, did not wish to comment, while AMP, which took over the AXA KiwiSaver scheme, said it was still deciding whether to participate in the float or how many shares it would buy.

Nigel Taite, president of the Institute of Financial Advisers, said individuals looking to buy into the Mighty River Power float should also take into account how much their KiwiSaver scheme would be investing, to ensure they did not overcommit to the stock.

"Most institutions are looking to buy it," Taite said.

"If people are looking at making a significant investment they probably should check with their KiwiSaver provider first and factor that into how many shares they should buy."

Prospectus tips

• Look first at the "Answers to Important Questions" section which outlines the basic information you need to know including who is providing the offer, how much you will pay for the shares, the likely returns, the procedures and time-frames for making the investment, and explains the main investment risks.

• Make sure you take time to read the offer document before you decide whether or not to invest.

• If you have more questions or don't understand what you are being invited to invest in then seek financial advice.

Source: Financial Markets Authority