NZ Super reaps more than $680m from Z Energy

The superannuation fund had initially invested NZ$ 209.8m in the energy company in 2010.

The New Zealand Superannuation Fund (NZ Super) has sold down its stake in New Zealand Exchange and Australian Stock Exchange-listed transport fuel company Z Energy for NZ$292 million ($197 million; €176 million), according to a statement.

The fund sold 36.4 million shares at NZ$8.01 per share in a block trade by UBS. It retains a 1.5 percent holding in the company worth NZ$47 million.

Since it had bought Z Energy in 2010, NZ Super has received more than NZ$1 billion in proceeds, making it one of the fund’s “top performing assets globally”, according to NZ Super’s chief investment officer Matt Whineray.

NZ Super and infrastructure investment company Infratil Limited initially purchased Z Energy from global energy giant Shell in 2010 for NZ$696.5 million, with each party taking a 50 percent share in the business.

In 2013, the company listed on the NZ and Australian stock exchanges and sold up to 60 percent of its shares, realising gross proceeds of NZ$840 million for the investors.

In October last year, NZ Super further reduced its stake and sold its 9.7 percent holding, receiving more than NZ$360 million in proceeds.

Nigel Gormly, head of international direct investment at the fund said Z Energy had been an “excellent investment” for the fund, with a gross return to date of 48 percent per annum.

“We are delighted to have contributed to the establishment of an iconic Kiwi company that all New Zealanders can be proud of. Over the last six years, Z Energy has grown into a strong, dynamic listed company,” Gormly said.

NZ Super’s residual stake will be managed by its internal team, along with external managers Devon Funds Management and Mint Asset Management.

The NZ$30 billion fund has more than NZ$4 billion invested in New Zealand. Major investments include minority stakes in forest management company Kaingaroa Timberlands, technology services company Datacom and aged care provider Metlifecare. It has returned more than 9.5 percent per annum.

Last month, NZ Super sold its fund stakes in buyout fund Hellman & Friedman VII, growth equity fund JMI Equity Fund VII and HIG Bayside Loan Opportunities Fund II, a mezzanine debt vehicle, as reported by Private Equity International.

Z Energy is one of the largest fuel companies in New Zealand and provides almost a third of the country’s fuel needs. It had recently acquired Chevron’s New Zealand assets for NZ$785 million.