Three months into her role as CEO of the New Zealand Superannuation Fund, Jo Townsend shared a stakeholder update, highlighting the fund’s progress and achievements this year.
In the 12-month period ending May 31, the fund achieved a 16.85% return. Townsend noted that the fund, which has assets of NZ$77.77 billion ($46.25 billion) is projected to almost double over the next 10 years, raising challenges and opportunities. Top of mind, Townsend wrote, is how the fund can scale and optimize, while retaining culture and organizational character.
“I’m conscious that the world is full of uncertainties and that the investment landscape is ever-changing,” Townsend wrote. “As the world gets more and more complicated, an ability to keep things simple, and remain nimble, will stand us in good stead.”
Townsend wrote the economy could appear choppy for the rest of the year. While there is a global decline in inflation and slowing global growth, Townsend wrote geopolitical issues, including global elections and ongoing conflicts are things to watch.
In her update, Townsend announced that NZ Super in June added to its holding in European post-trade services company Euroclear, adding an additional 3.7% stake in the company to the fund’s initial 4.99% holding. The follow-on investment makes the fund the company’s fourth largest individual shareholder and makes Euroclear one of the largest single holdings in the NZ Super Fund.
Townsend also noted that a law, passed in June, will enable NZ Super to take controlling interests in other entities, something for which the fund has sought authority for several years.
“This change will not fundamentally change the way we invest,” Townsend wrote. “It will, however, contribute to improved investment management, open up a larger investment opportunity set, and increase our ability to drive positive environmental, social and governance outcomes. Alongside that, it removes a constraint on our ability to respond to domestic investment opportunities.”
The fund is continuing its search for a new CIO, its previous investment chief, Stephen Gilmore, became the CIO of the California Public Employees’ Retirement System in early July. In the interim, Alex Bacchus, who was head of strategic tilting at the super, is stepping in.
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Tags: Alex Bacchus, Jo Townsend, NZ Super, NZ Superannuation, Stephen Gilmore