AUCKLAND, New Zealand--(BUSINESS WIRE)--
Super Fund has made another major energy investment, committing up
to US$250 million to North American gas and oil opportunities with
experienced energy investor KKR.
Up to US$175 million will be directed, on a flexible basis, to new KKR
energy private equity investments in North American natural gas
exploration and production, midstream, downstream and/or energy
infrastructure and services.
The remaining US$75 million will be invested with the $2.0 billion KKR
Energy Income and Growth Fund, a new KKR fund focused primarily on
investing in the development of unconventional gas and oil resources in
Other NZ Super Fund energy sector investments over the past 12 months
include US$100 million in Bloom Energy, which uses solid oxide fuel cell
technology to create power, and US$55 million in wind turbine
The investments follow extensive research into opportunities in the
energy sector by the Fund over the past couple of years.
"These new investments will broaden and diversify the Fund's current
exposure to energy, in line with what is a changing global energy
sector," said the Fund's General Manager Investments Matt Whineray.
Mr. Whineray said the KKR investment was premised on attractive
long-term returns in energy and significant market changes including the
rapid development of natural gas and unconventional oil assets.
"Developments in North American gas and oil are profoundly changing both
global energy markets and markets within North America," Mr. Whineray
said. "For example, there is a large and ongoing decline in the burning
of coal in the US as energy utilities transition towards gas supplies.
Access to these opportunities is, however, difficult to achieve solely
through listed markets. Partnering with KKR will give us the benefit of
their expertise and deep relationships in the energy sector."
Mr. Whineray said that while the Fund would continue to hold a
substantial passive exposure to the energy sector, consistent with its
market cap-weighted Reference Portfolio, the KKR mandate offered a
number of benefits to the Fund. "These benefits include improved
expected returns, resilience in relation to a rapidly changing sector
and greater insight into, and control over, our investment exposures.
Our focus on responsible investment will also be bolstered by KKR's
expertise in the management of environmental, social and governance
KKR has been investing in the energy sector for more than 20 years and
its global energy business covers the full energy supply chain. The
company has been at the forefront of shifts in investor interest from
conventional to unconventional oil and natural gas resources.
Justin Reizes, Member of KKR and Head of KKR Australia said KKR looked
forward to investing on behalf of the NZ Super Fund in what was a
fast-growing but capital-starved sector. "The rapid development of
unconventional shale basins provides attractive development and
infrastructure investment opportunities for long-term investors such as
the NZ Super Fund."
According to October 2012 estimates from ICF International and
elaborated upon in a white
paper by KKR, developing the resource and the delivery
infrastructure to bring this new supply to market will require $2
trillion in upstream investments for natural gas production (including
associated volumes of condensate and natural gas liquids) between 2011
"KKR, which like the NZ Super Fund is a signatory to the United
Nations-backed Principles for Responsible Investment, is deeply involved
with the companies with which it invests," said Mr. Reizes. "We
incorporate environmental, social and governance factors into our
investment processes and ownership practices, and seek to ensure that
best operational practices are in place at the companies with which we
This is the NZ Super Fund's third investment with KKR. It also has
investments in other KKR funds, including KKR Asian Fund and KKR 2006
About the NZ Super Fund
The $25 billion New Zealand Superannuation Fund invests globally in
order to help pre-fund New Zealanders' future retirement entitlements.
The Fund is managed by a Crown entity, the Guardians of New Zealand
Superannuation. Since inception in September 2003 the Fund has returned
9.57% p.a. after costs and before tax.
Founded in 1976 and led by Henry
Kravis and George
Roberts, KKR is a leading global investment firm with $94.3 billion
in assets under management as of December 31, 2013. With offices around
the world, KKR manages assets through a variety of investment funds and
accounts covering multiple asset classes. KKR seeks to create value by
bringing operational expertise to its portfolio companies and through
active oversight and monitoring of its investments. KKR complements its
investment expertise and strengthens interactions with investors through
its client relationships and capital markets platform. KKR is publicly
traded on the New York Stock Exchange (NYSE:KKR) and "KKR", as used in
this release, includes its subsidiaries, their managed investment funds
and accounts, and/or their affiliated investment vehicles, as
appropriate. For additional information, please visit KKR's website at www.kkr.com.
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NZ Super Fund
Catherine Etheredge, +64 274 777 501
Okun, +65 6922 5800
Director of Asia-Pacific Public Affairs
Huller, +1 212-230-9722
Director of Communications, Americas
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