NZ Super buys 50% of RetireAustralia

The New Zealand sovereign wealth fund teamed with infrastructure firm Infratil for the A$640m deal

The New Zealand Superannuation Fund and infrastructure firm Infratil have paid A$640 million ($518 million; €433 million) to buy out retirement housing provider RetireAustralia, according to a statement.

Each firm will take a 50 percent stake in the Brisbane-headquartered business, which operates over 3,700 living units and apartments in Australia.

The deal will be made up of A$429.5 million (A$214.8 million each) in cash equity, with the balance being funded by existing bank debt on RetireAustralia’s balance sheet.

While NZ Super and Infratil are putting up the capital, the investment will be managed by investment management firm H.R.L. Morrison & Co on behalf of Infratil and the NZ Super Fund. New Zealand-based H.R.L. Morrison & Co has held a NZ Super Fund investment mandate since 2006.

The three firms have also worked together before, when Infratil and the NZ Super Fund acquired the downstream assets of Shell New Zealand (now Z Energy) in 2010. The investment was also managed by H.R.L. Morrison & Co.

Australia’s retirement sector has attracted private equity investors recently. In November 2014, New York-based private equity and real estate firm, The Blackstone Group, formed a strategic partnership with National Lifestyle Villages, a greenfield developer of retirement communities in Australia, Private Equity International reported earlier. The firm agreed to invest $150 million in nine communities in Western Australia and one in Victoria.

The New Zealand Superannuation Fund is a NZ$27 billion ($20.7 billion; €17.2 billion) sovereign wealth fund. A long-term, growth-oriented investor, the fund has returned 9.9 percent per annum since its inception in 2003, according to the firm. NZ Super also has investments in Australian toll roads, timber, private equity and listed equities.