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NZ Super takes direct stake in Fidelity Life

The $69m acquisition of New Zealand’s largest Kiwi-owned insurer is the latest move in the sovereign wealth's plans to increase domestic investments.

New Zealand Superannuation Fund has picked up a minimum 41.1 percent stake in Fidelity Life Assurance for NZ$100 million ($69 million; €60 million), in line with its strategy to boost its domestic holdings.

In early October the NZ$36 billion NZ Super said that ramping up investments in the domestic market is a key priority in the next year. To deliver on its investment focus, the Auckland-based sovereign wealth fund has increased staffing in its direct investment team in the last year and also began setting up its Investment Hub, which will look at new and larger direct investments in New Zealand market. NZ Super typically targets transactions between NZ$100 million and NZ$300 million for a 20 percent to 50 percent stake. It currently has around NZ$5 billion invested locally.

The fund’s direct investment team manages its investments in Kaingaroa Timberlands, Datacom, Metlifecare and Kiwibank. The team also manages the fund’s first direct property development, 1.95 hectares of land at Hobsonville Point in Auckland.

Fidelity Life, the country’s largest Kiwi-owned insurer by assets, is privately held by more than 150 shareholders. The proposed investment will consist of NZ$75 million of new shares issued to NZ Super at NZ$115 per share and the acquisition of a minimum of NZ$25 million of existing shares, valuing the company between NZ$198 million and NZ$220 million. As part of the transaction, eligible minority shareholders (including all New Zealand resident shareholders) will also have the opportunity to sell some or all of their shares to the investor for NZ$130 per share.

Capital from NZ Super will be used to support the company’s long-term growth plans, Matt Whineray, NZ Super chief investment officer said in a statement.

This new capital will also Fidelity to build to build digital capability to support innovation, productivity and improved customer and stakeholder support, Nadine Tereora, chief executive of Fidelity Life, added.

The transaction is subject to shareholder approval.