Super Fund spends US$100m on sustainable seed investment

The money will be invested in companies in North America and Europe involved in sectors such as energy transformation. Photo / Brett Phibbs

The manager of the Superannuation Fund has given US$100 million to a Massachusetts-based fund that invests in early stage companies with a focus on mitigating climate change.

The commitment has been given to Wellington Management’s Climate Innovation Fund, which targets companies in North America and Europe that are involved in energy transformation, sustainable buildings and cities, transport, industrial efficiency and food and agriculture.

Guardians of New Zealand Superannuation head of external investment Del Hart, said the fund aligns with its investment philosophy and objectives.

“Wellington’s research-led investment process, including its partnerships with the likes of Woodwell Climate Research Center and the Joint Program on the Science and Policy of Global Change at the Massachusetts Institute of Technology also aligns with our approach.”

Super Fund head of external investment and partnerships Del Hart says Wellington Management's fund aligns with the Super Fund's own investment philosophy. Photo / Supplied

Wellington Management, headquartered in Boston, managed more than US$1 trillion in assets for more than 2,000 clients globally.

The fund would use the money to help young companies by contributing to their Series B or Series C investment rounds, according to a Super Fund press release.

Last year the Super Fund committed US$100m to a venture capital fund that invested in technologies that aimed to decarbonise the real estate industry.

In June this year, the NZ Super Fund shifted about 40 per cent of its overall investment portfolio to market indices aligned with the Paris Agreement, aiming to further reduce its portfolio’s carbon footprint and deliver improved environment, social and governance outcomes.

The Super Fund got into venture capital in 2020, after it received Government approval to launch a second fund called Elevate NZ, with $300m managed by NZ Growth Capital Partners on its behalf.