A new social infrastructure fund could eventually be listed on the stock exchange if it is successful in raising $125 million from a public share offer.Craigs Investment Partners and Morrison and Co have launched the fund to invest in the government's pub
A new social infrastructure fund could eventually be listed on the stock exchange if it is successful in raising $125 million from a public share offer.
Craigs Investment Partners and Morrison and Co have launched the fund to invest in the government's public-private partnership vehicle, Public Infrastructure Partners (PIP).
PIP has been set up to build social infrastructure projects such as prisons, schools and hospitals and already has $100 million invested from the New Zealand Superannuation Fund.
Craigs managing director Neil Craig said the fund’s model was similar to the firm’s two private equity Pohutakawa Funds, where Craigs’ facilitates a secondary market.
“We keep other wealth managers informed of what the net asset value of the fund is and what the last sale prices are. So we help them get some liquidity,” he said.
“The problem of going into the listed arena with things that are not fully invested you end up at the mercy of the market and you get discounted quite heavily, or can be discounted quite heavily, and it often doesn’t reflect true value.
“So we will run the market in the short term. Once we have got to a level of investment where the market will value it correctly we will look at the idea of giving it a much more liquid market like the NZX.”
The initial offer for the NZ Social Infrastructure Fund is for 50 million $1 shares, with oversubscriptions available for another $75 million. A minimum investment parcel for the public offer is 20,000 shares. The initial subscription is for 10 cents per share and the remaining 90 cents payable in tranches.
Mr Craig said investors would need a long term horizon span as the assets were long term in nature.
“It will be an interesting space in the next few years as there is not sufficient capital to do all the infrastructural type things required.”
PIP fund general manager Peter Coman said social infrastructure PPP were typically long term contracts with government counterparties, and revenues based on asset availability and linked with inflation
