NZ Super Fund commits $20m to private equity investment

State-funded investor the New Zealand Superannuation Fund (NZSF) is making its second foray into the high-risk, high-return world of private equity investment.

NZSF announced today it has committed $20 million to the Direct Capital Partners III fund, which invests in businesses in New Zealand and Australia.

The Direct Capital III fund is the seventh fund raised by Auckland-based Direct Capital Management Ltd, which has $350 million under management.

The firm was established in 1994 by Ross George, Bill Kermode and Mark Hutton.

In March this year NZSF announced plans to invest up to $100 million in local private equity funds over the next three to five years.

Its first investment was committing $23.75 million to the AMP Pencarrow Private Equity Fund in June.

Today's investment was given the green flag by NZSF's independent advisors, Quentin Ayers.

The NZSF, established by the Government in September 2003, is intended to partially provide for the future cost of superannuation, which is expected to double in the next 50 years.

The Government plans to allocate an average of $2.2 billion a year to the fund over the next 20 years, with the fund expected to grow to about $100 billion by 2020.

The value of the NZSF as at August 31 was $7.2 billion.

- NZPA