NZ Super backs PPP with NZ$100m(2)

HRL Morrison’s Public Infrastructure Partnership Fund aims to raise NZ$500m to invest in New Zealand’s social infrastructure.

The Guardians of New Zealand Superannuation has agreed to commit NZ$100 million ($66 million; €46 million) to New Zealand-based infrastructure investment manager HRL Morrison’s Public Infrastructure Partnership Fund (PIP Fund).

The public-private partnership aims to raise NZ$500 million over the next 12 months, with debt raised on a deal by deal basis. It anticipates a first close on between NZ$100 million and NZ$150 million in the next six weeks. The fund’s investors are mainly New Zealand-based institutions, Peter Coman, the property sector head at Morrison & Co, said in an interview.

PIP Fund will invest in New Zealand’s social infrastructure such as schools, student accommodation, social housing and hospitals. It can invest opportunistically in Australia, subject to advisory committee approval, added Coman.

The fund’s investments will take the form of concession agreements typically between 25 and 35 years. The government will pay the fund for financing, building and managing the facilities, after which they will be turned over to public ownership.

The Guardians of New Zealand Superannuation have a working history with Morrison. Beside the cornerstone investment into the PIP Fund, the firm has a global mandate from the sovereign wealth fund to invest in listed and private market infrastructures assets.

As of 31 May, the New Zealand Superannuation Fund has NZ$13.1 billion in assets under management. Currently, the fund allocates 5 percent of its total assets to infrastructure, although its target allocation to the asset class is 15 percent, a spokesman for the fund said in an interview.

The PIP Fund is Morrison’s first unlisted and close-ended infrastructure fund. In November 2008, the firm partnered with New Zealand fund manager Fisher Funds to launch Fisher Morrison Infrastructure Fund, a retail infrastructure fund. The partnership resulted in Morrison taking a 26 percent equity stake in Fisher as well. Morrison also manages Infratil, an infrastructure fund listed on the New Zealand Exchange.