NZ Super to pump $68.5m into Kiwi-owned life insurer Fidelity for 41.1% stake

Visual from company website

New Zealand Superannuation Fund (NZ Super) is acquiring 41.1 per cent cornerstone stake in life insurer Fidelity Life investing a minimum $68.5 million (NZ$100 million) in the company.

NZ Super Fund as a major shareholder will provide new capital which will enable the company to accelerate its growth strategy, Fidelity Life Chair, Brian Blake, said in a joint statement issued on Tuesday.

The proposed investment is to be made up of $75 million of new shares issued to the NZ Super Fund at $115 per share and the acquisition of a minimum of $25 million of existing shares. As part of the acquisition of existing shares, eligible minority shareholders (including all New Zealand resident shareholders) will have the opportunity to sell some or all of their shares to the NZ Super Fund for $130 per share.

This offer does not extend to the company’s majority shareholders. The NZ Super Fund will acquire shares from the Fidelity Family Trust at $115 per share.

“If our shareholders provide the necessary approval for the investment to proceed, the new capital will allow us to deliver on our future strategy providing strong, sustainable returns and growth over the long term,” said Blake.

In fact, Fidelity Life’s Board is recommending shareholders to support the investment. Shareholders, including the Fidelity Family Trust, will vote on changes to Fidelity Life’s constitution needed for the proposal to proceed at the company’s Annual Meeting on 12 December.

Fidelity Life, New Zealand’s largest Kiwi-owned life insurer, is privately held by more than 150 shareholders. Founded in 1973 it has 100,000 customers. The new capital is set to enable the insurer to build digital capability to support innovation, productivity and improved support for customers.

Meanwhile, NZ Super, a NZ$36 billion fund, is a long-term, growth-oriented investor and has returned 10 per cent p.a. since inception in 2003, and currently has around $5 billion invested in NZ, including significant stakes in Kaingaroa Timberlands, Datacom, Kiwibank and Metlifecare.

The Auckland-based fund had posted a return of 20.71 per cent for the year ended June 30, 2017, one of the best annual performances for the sovereign fund largely backed by a sustained rally in global equity markets and the fund’s “active investment strategies,” it had said in its annual report last month.

Independent advisers Simmons Corporate Finance have concluded that the value of the Fidelity Life shares involved in the proposed transaction is in the range of $110-$130 per share and that the total value of the company is between $198 million and $220 million.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.