New Zealand Super close to selling $500m RE portfolio – exclusive

The $30 billion superannuation fund is understood to have appointed advisors to oversee the sale of a collection of commitments to real estate funds as part of a strategic shift.

New Zealand Super Fund, the superannuation fund for New Zealand retirees, is lining up the sale of a portfolio of stakes in private real estate funds, PERE understands.

It is believed that between 12 and 15 fund stakes are being marketed representing $500 million of equity commitments.

Advisor Greenhill Cogent has been mandated to run the sale process which is thought to be reaching its final stages and a shortlist of bidders is believed already to have been determined. Secondaries investment firms Partners Group and Landmark Partners are understood to be among the bidding parties as Metropolitan Real Estate, the multi-manager.

According to NZ Super’s October monthly public communication, real estate accounts for just 1 percent of its $29.8 billion of assets, implying a current value of just less than $300 million.

Nonetheless, according to certain people familiar with the process, fund performance is not thought to be the driving factor behind the offload. Moreover, NZ Super is understood to be keen to re-weight its holdings and, as part of that, its real estate positions are being offered for sale.

According to one source, who declined to be named due to the sensitive nature of the process, NZ Super had unofficially sounded out buyers for its real estate assets before although this is the first time the portfolio has been subject to an official process with an advisor mandated to run it.

He said: “[NZ Super] has been looking to price its entire indirect real estate portfolio and see what the outcome is. They have done it informally without hiring advisors. Now it’s more formal.”

Another source, who also wanted to remain anonymous, said: “Now it is in the final process” and “they are doing this on a portfolio basis.”

NZ Super has investments in a range of well-known real estate investment funds including European funds Mountgrange Real Estate Opportunity Fund, Orion Real Estate Fund III and Sveafastigheter Fund III and Asian funds Gaw Capital Gateway Real Estate Fund III, Secured Capital’s SCJREP IV Loan Fund and Red Fort India Real Estate Fund II.

None of the parties involved would comment.