The NZ Super Fund will invest up to US$250 million ($293 million) in North American gas and oil with global energy investor KKR.
Up to US$175m will be directed, on a flexible basis, to new KKR energy private equity investments in North American natural gas exploration and production, midstream, downstream and/or energy infrastructure and services, NZ Super Fund said in a statement.
The remaining US$75m will be invested with the US$2 billion KKR Energy Income and Growth Fund, a new KKR fund focused primarily on investing in the development of unconventional gas and oil resources in North America.
Other NZ Super Fund energy sector investments over the past 12 months include US$100m in Bloom Energy, which uses solid oxide fuel cell technology to create power, and US$55m in wind turbine manufacturer Ogin.
The fund's general manager of investments, Matt Whineray, said: "These new investments will broaden and diversify the Fund's current exposure to energy, in line with what is a changing global energy sector."
Whineray said the KKR investment was based on expected attractive long-term returns in energy and significant market changes, including the rapid development of natural gas and unconventional oil assets.
"Developments in North American gas and oil are profoundly changing both global energy markets and markets within North America," Whineray said.
"For example, there is a large and ongoing decline in the burning of coal in the US as energy utilities transition towards gas supplies.
"Access to these opportunities is, however, difficult to achieve solely through listed markets. Partnering with KKR will give us the benefit of their expertise and deep relationships in the energy sector."
- Fairfax Media