Super fund could invest in overseas building projects

Overseas bridges and roads could be built with taxpayer dollars from the New Zealand Superannuation Fund as it moves to invest more in property and alternative assets such as infrastructure.

The so-called Cullen super fund is managed by a board of guardians and its chairman David May today said allocation of the fund's strategic assets had been revised.

The changes increased the weighting to alternative assets -- such as infrastructure, private equity, commodities and forestry -- as well as to property.

The aim was to increase the weighting of alternative assets over a number of years from 7 per cent to 25 per cent and the weighting of property from 6 per cent to 10 per cent.

The fund would reduce the weighting of global listed equities to do this, Mr May said.

The existing proportion of 7.5 per cent would be kept in New Zealand equities because "we think there remain advantages in investing in New Zealand".

Mr May told reporters the shift was "almost a no-brainer" as the revised portfolio would produce the same returns over 30 years as the current model but minimise the long-term risks.

He emphasised the shift would be made over time.

As at February 28, the fund was worth $5.75 billion. By 2020, it is expected to grow to around $76b.

Chief investment officer Paul Dyer said there were no specific infrastructure projects in mind as yet but the brief was wide and electricity, gas and water utilities, roads, airports, bridges and roading projects could all be looked at.

For instance, new roads and bridges for Auckland could be considered, he said.

However, projects in New Zealand would be assessed on the same basis as infrastructure projects overseas with investments made in those expected to produce the better returns.

New Zealand First leader Winston Peters said: "There is no promise that investing in New Zealand's key infrastructure will be a priority."

There were significant assets in New Zealand which would offer a substantial return to the Government while addressing current infrastructure shortages, he said.

- NZPA