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Super fund exploits long term advantage

Published: 1:54PM Sunday August 29, 2010 Source: ONE News

As New Zealand baby-boomers prepare for retirement the head of the super fund says that New Zealand is well poised to take advantage of global investment opportunities.

Adrian Orr said the current economic climate is one of change, but denied it is cataclysmic.

"We are going through an incredible transformation in the global economy," he said.

Orr told ONE's Q A show that there are "enormous growth opportunities globally".

The fund, which does not begin paying out for another 20 years, has time on its side and Orr said that this long term horizon gives the fund the potential to exploit the current situation for long term gain through exposure to growth assets.

Three billion dollars recently invested was spread across global sharemarkets and across different industry types. It included increased exposure to property in New York and Asia, forestry in Australia and infrastructure such as an Austrian airport.

But Orr denied the global focus is contrary to domestic interests, with local investment included in the fund's investment strategies.

The National government had expressed a desire that 40% would be invested locally, but the fund is only required to "seek and consider" local opportunities.

That's something that Orr said was not easy to achieve as a a large player in a small market.

"We come towards the equity market, the prices go north," said Orr.

Orr understands but is disappointed in the government's decision to suspend fund contributions at a time of increased debt.

"It's well worth continuing to save for the known rising cost of future superannuation."

However the Green Party has questioned the wisdom of the fund's investments when comparing the return to that of the Norwegian Pension Fund.

Green Party co-leader Russel Norman found little merit in purchases such as Fly Buys and Shell's 229 petrol stations prefering Norway's ethical investment strategy.