How We Invest White Paper – NZ Expansion Capital

The Guardians of New Zealand Superannuation uses a number of active investment strategies to add value to the New Zealand Superannuation Fund (“the Fund”). Expansion capital, which exploits some of the Fund’s key endowments, is a key active investment strategy for the Fund in its domestic market, New Zealand.

Our experience supports this. We have been investing in NZ expansion capital since 2005 (Direct Capital Fund III) and have committed more than NZ$450 million1. Over this time we have generated an Internal Rate of Return (IRR) of 14.7% net of fees or a 1.5x Multiple of Invested Capital (MOIC), which is 0.7% over our expected return at the outset of the investment. The comparable Public Market Equivalent (PME) generated a return of 10.7% over the same period.

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