NZ Super Fund commits $100m to Wellington Management's climate-focused vehicle

NZ Super Fund commits $100m to Wellington Management's climate-focused vehicle

Photo by Markus Spiske on Unsplash

NZ Super Fund, New Zealand’s sovereign wealth fund, announced that it has committed $100 million to an investment vehicle that focuses on climate change mitigation and adaptation.

The commitment is for Wellington Management’s Climate Innovation Fund I (CIF), which will invest in companies developing products and solutions in sectors such as energy transformation, sustainable buildings and cities, transportation and mobility, industrial and enterprise efficiency, and food and agriculture.

CIF was launched in October this year, according to a US Securities and Exchange Commission filing seen by DealStreetAsia. The filing did not specify the target for the fund but said fundraising will not last more than a year.

The vehicle focuses on financial returns and positive environmental impacts, according to the announcement. It seeks to invest in Series B and Series C rounds, predominantly across North America and Europe.

The fund’s dual focus matched the NZ Super Fund’s own sustainable investment philosophy and objectives, according to Del Hart, head of external investment and partnerships for the Guardians of New Zealand Superannuation.

Hart added that NZ Super Fund’s involvement with CIF could expand to include co-investments in successful portfolio companies.

The commitment follows NZ Super Fund’s similar investments in Fifth Wall Climate Technology Fund and Generation Investment Management’s Sustainable Fund IV.

Wellington Management, the manager of CIF, is one of the world’s largest independent investment management firms, serving as an adviser to over 2,400 clients in more than 60 countries. The firm manages more than $1 trillion globally in assets under management.

On the other hand, NZ Super Fund invests money on behalf of the New Zealand Government to help pay for the increased cost of universal pension entitlements in the future.

As of June 30, 2022, the NZ Super Fund assets under management stood at NZ$55.7 billion, down from approximately NZ$59 billion the previous year, its 2022 Annual Report released in October showed.

Since the Fund started investing in 2003, it has returned 9.65% per annum.

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