$125m sought for New Zealand social infrastructure

New Zealand investment firm Morrison & Co and investment advisory firm Craigs Investment Partners have teamed up to raise as much as $125m for a fund focused on social infrastructure opportunities in New Zealand.

The New Zealand Social Infrastructure Fund (NZSIF) will seek to raise up to $125 million from an initial public offering of shares on the New Zealand Exchange. NZSIF will invest the proceeds of the share offer in Morrison & Co PIP Fund, a wholly owned subsidiary of Morrison & Co.

The PIP Fund, which will fund the delivery of social infrastructure assets through public-private partnerships (PPPs), is backed by a $100 million cornerstone investment from the NZ Superannuation Fund. The fund was launched in October 2009.

Peter Coman, managing director of the PIP Fund, said the fund would “kick-start a new investment sector in this country”. Traditionally, New Zealand social infrastructure projects – such as schools, hospitals and universities – have been funded, operated and maintained by the public sector.

The board of NZSIF is chaired by Kim Ellis, former chief executive of Waste Management NZ, a New Zealand waste company. Ellis will represent NZSIF on the PIP Fund advisory committee. Neil Craig and Mike Caird, respectively executive chairman and director of Craigs Investment Partners, will also have places on the board.

NZSIF is offering 50 million shares at an issue price of $1.00 per share with a provision to issue a further 75 million shares as oversubscriptions. Public road shows for NZSIF are being held throughout New Zealand from mid-March to mid-April 2010.

The fund coincides with New Zealand taking its first steps towards embracing social infrastructure PPPs. For example, in August last year, the government said it would consider a PPP mechanism for the procurement of the country’s next prison; in December, the Ministry of Education and Treasury said it was assessing the suitability of PPP models for building and maintaining schools.

Perhaps the most significant development came earlier this month with the release of New Zealand’s National Infrastructure Plan, which confirmed that the government intended to use PPPs where they represent value for taxpayers’ money.