Chance to invest in community assets

KIRK HARGREAVES/The Press

SOCIAL INFRASTRUCTURE: A fund has been launched, aimed at building prisons, schools, hospitals and other facilities linked to the Government's plans of public-private partnerships.

Relevant offers

An investment fund aimed at building prisons, schools, hospitals and other social infrastructure is open to Kiwis with $20,000 to spare.

Craigs Investment Partners has launched the New Zealand Social Infrastructure Fund to raise up to $125 million for public-private partnerships favoured by the Government for improving taxpayer assets.

The money would be invested in the Public Infrastructure Partners programme, managed by Morrison and Co, managers of airport and infrastructure company Infratil, alongside $100m invested by the New Zealand Superannuation Fund.

With a minimum investment parcel of 20,000 $1 shares, PIP fund general manager Peter Coman said the fund was targeted at "experienced investors who understand these sorts of products".

The initial offer was for 50 million shares, with oversubscriptions available for another $75m worth. Council for Infrastructure Development chief executive Stephen Selwood said the fund offered a new option which may expand to replace the fast disappearing finance company industry.

"This provides an investment stream with more opportunity for revenue growth than is possible through traditional bank or government bond markets."

The need for infrastructure outstripped the ability of the Government to pay for it so the new fund was another "tool" that allowed New Zealanders to invest in their own country.

"When you look overseas the use of infrastructure vehicles like this is almost a global initiative but it hasn't had any exposure in New Zealand, so we look forward to this."

Mr Coman said they had no transactions to announce yet, but he was working on assertions from the Government that they were keen to pursue partnerships with the private sector to fund development of community assets.

The fund was aimed at projects involving non-commercial "social" assets such as schools, hospitals, universities and community housing. "We're focusing on bricks and mortar-type assets, where we are taking the design, construction and life cycle maintenance risk."

Mr Coman said a central risk was competition from other infrastructure developers in New Zealand and overseas. The fund had a target return of 11 per cent per year.

Craigs Investment Partners managing director Frank Aldridge said trading would be done internally by them, with market information posted on a website and sent to investors regularly.

He was confident the $50m subscription level would be achieved easily but beyond that it was hard to say how much demand there was, hence the large capacity for oversubscription and long offer period, closing mid-April.

"It's an education exercise for investors because it is a new asset class."

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