The portfolio includes a 49.9 per cent stake of the Melbourne Convention and Exhibition Centre, two New Zealand education PPPs, health accommodation in Bendigo, Victoria, a half-stake in student accommodation in Wollongong, New South Wales, and the Auckland prison PPP at Albany.
The assets have all been built and have operating contracts that terminate between 2034 and 2053. That means they now offer steady income to investors at a time when low interest rates boost the attraction of reliable dividends. Any transaction will have to get the necessary approvals from government counterparties.
NZSIF values its 23 per cent stake in the PIP Fund at $56.8m, implying the PIP Fund's March 31 valuation was around $247.5m.
NZSIF investors paid $1 a share to invest in the fund and have received capital returns of 3.6 cents per share and distributions totalling 22.8 cents per share during the past nine years. The net asset value, adjusted for a July distribution of 2 cents per share, is $1.37 per share.
"We will keep you informed as we are permitted to release information on the process. The aim is to deliver an outcome for investors that is in excess of the current NAV," Ellis said in the annual report.
The retail fund targeted an internal rate of return of 11 per cent a year before tax and after all other costs, according to its prospectus. The offer document said distributions were likely to rise once PIP Fund investments were operating and generating income and would come in the form of dividends, capital returns, and potentially capital gains on asset sales.
NZSIF will hold its annual meeting on August 30 in Auckland.
Morrison & Co still manages the PIP Fund II and PIP Fund III, which have invested in the Puhoi-to-Warkworth highway, Waikeria prison, and a third New Zealand schools PPP.