New Zealand Social Infrastructure Fund Ltd - NZSIF

[CJ]

Offer of up to 125 million Shares at $1.00 per Share

Craigs Investment Partners Limited and Morrison & Co PIP Limited have established the New Zealand Social Infrastructure Fund Limited (“NZSIF”) to invest as a Limited Partner in the Public Infrastructure Partners LP (“PIP Fund”). NZSIF will enable New Zealand investors to participate in the development of Social Infrastructure Assets through Public-Private Partnerships (“PPPs”).

NZSIF presents an opportunity to invest in New Zealand social infrastructure assets

NZSIF has an exclusive opportunity to undertake a public offer to raise capital to invest in the PIP Fund. The NZ Superannuation Fund has committed to invest $100 million in the PIP Fund as the cornerstone investor. NZSIF will invest in the PIP Fund on substantially the same terms as the NZ Superannuation Fund and other institutional investors, providing a dedicated pool of capital to fund the delivery of Social Infrastructure Assets through PPPs, with a focus on New Zealand opportunities.

Issuer New Zealand Social Infrastructure Fund Limited ("NZSIF")
Offer Opens 17 March 2010
Offer Closes 30 April 2010
Offer 50 million Shares at an issue price of $1.00 per Share (with provision to issue up to a further 75 million Shares at $1.00 per Share in oversubscriptions)
Initial Subscription $0.10 per Share subscribed for is payable upon application (plus the Application Fee)
Further Calls The remaining $0.90 per Share, being the balance between the initial subscription and the Issue Price, is payable in tranches subject to 20 Business Days’ advance notice to the investor
Application Fee Application Fee of $0.02 per Share is payable on application
Minimum Investment 20,000 Shares (paid up to $0.10 per Share), and thereafter in 5,000 Share increments
Risks Risks concerning an investment in NZSIF are summarised in Section 13 – Risks of the registered Prospectus & Investment Statement
Listing Listing of the Shares is not currently being sought. Whilst there will be no formal secondary market for the Shares, the Administration Manager will provide an order matching facility for buyers and sellers of Shares to assist with the provision of liquidity for holders of Shares during the term of the PIP Fund.
Promoters Craigs Investment Partners and Morrison & Co PIP Limited (and each of their directors who are not directors of NZSIF)
Lead Manager Craigs Investment Partners Limited

www.craigsip.com/userfiles/file/NZSIF-Offer-Document.pdf

[CJ]

http://www.nbr.co.nz/article/social-infrastructure-fund-based-private-equity-model-120166

http://www.stuff.co.nz/business/industries/3458275/Craigs-launches-infrastructure-fund

[CJ]

I just have just received the prospectus but haven't had the chance to read it yet. Interested in others thoughts.

Edit: Initial thoughts. The funds are earmarked for the PIP. NZSIF has no involvement in the running of the PIP. So why does NZSIF Management Ltd it get a performance fee?

I understand why Morrison & Co PIP Ltd gets a performance fee since it is actually running the PIP.

This seems to be M&C clipping the ticket twice.

[BRICKS]

NEVER BUY funds EVER.. remember THAT..

[POSSUM THE CAT]

Not worth touching No Sharemarket listing no liquidity, only for idiots

[Balance]

Fee gathering mechanism for Morrison and Craigs.

Would have thought investors would have learnt by now but obviously not!

[CJ]

NEVER BUY funds EVER.. remember THAT..Some of the PE funds have done very well. It is a matter of finding the right one. Since NZSuper is investing into the PIP, I thought this might be one of the good ones.


Not worth touching No Sharemarket listing no liquidity, only for idiotsAgree, lack of liquidity is an issue. But most PE funds have this issue so if the reward is great enough, it could be a small part of a wider portfolio.


Fee gathering mechanism for Morrison and Craigs.

Would have thought investors would have learnt by now but obviously not!That is how I see it.

Seems a shame as if you could invest directly into the PIP, it could have been a good idea, but with 2 levels of performance fees, the reward cant match the risk???

[GTM 3442]

Can't sell units. Just like Finance Company Debentures. Don't buy what you can't sell.

Who sets the price ?

When are the "tranches" (instalments) payable ?

Don't think so, somehow.

But, on the other hand, I'm not sure that liquidity is necessarily a good thing for all types of investment - especially those with a looooong time-frame. It can lead to a pre-occupation with the share price, rather than the asset value and the returns. Else why are all those offshore pension funds so keen to buy illiquid NZ forestry assets ?

[macduffy]

Else why are all those offshore pension funds so keen to buy illiquid NZ forestry assets ?

Pension funds' investment philosophies aren't typical of most investors'.

They need long term assets to meet long term pension liabilities.

[GTM 3442]

Thank you macduffy.

Still don't like the idea of owning something with no readily available "price", and no readily available market.

But as CJ says - ". . . a small part of a wider portfolio."

Wonder if my aversion to fees will keep me out ?

[macduffy]

It doesn't appeal to me, for the reasons you mention.

Besides, I like to make my own mistakes!

[GTM 3442]

I still like the idea.

But I do have reservations about the structure.

[CJ]

Pension funds' investment philosophies aren't typical of most investors'.

They need long term assets to meet long term pension liabilities.But they still look for a return that matches the risk. The only difference is liquidity isn't such a big issue.

I may have been interested in a small punt but will not pay performance fees to someone who cant influence performance.

Re the comment on making a call for the installments, I assume calls will be made as as when they need the capital. This is common in a PE fund. No point having $75m sitting in the bank when you don't have any investments.

[GTM 3442]

I may have been interested in a small punt but will not pay performance fees to someone who cant influence performance.


Very wise. It would sit nicely beside a couple of other things in the portfolio.

[CJ]

I dont think they would be happy with only $41m of investment:


Private investors commit $41 million to social infrastructure fund
Tuesday 4th May 2010

The New Zealand Social Infrastructure Fund’s initial public offer has raised $41 million of committed capital from approximately 750 investors.

NZSIF is an investment vehicle managed by Morrison & Co. PIP and Craigs Investment Partners, to in turn invest in the Public Infrastructure Partners Partnership (the PIP Fund). PIP is an institutional fund established to invest in public-private partnerships delivering assets such as schools and hospitals, which already has $100 million invested from the NZ Superannuation Fund.

NZSIF has another $100 million of committed funds from several large investors, and hopes to have a total of $200 million by October 2010 as a final amount to invest in PIP.PIP fund general manager Peter Coman said that given market conditions and the newness of this type of investment vehicle, “we’re very happy with where we’ve landed.”

“We’re very comfortable that the investors who have come in are quite sophisticated and understand this opportunity,” he said.

It is expected that NZSIF will pay out an estimated 11% internal rate of return over the 15-year life of the fund, rather than being an annual return.

Initially there will be calls on capital to construct assets, and as these are built and operated to a standard, the Government will pay a specified pre-agreed rate. For the early projects to be developed and delivered, there won’t be an income stream, but once the asset is operational there will be income and capital growth that can be distributed to investors.

“Over the life of the fund we expect an 11% return,” Coman said.

“We’ve spend a lot of time explaining that point, and its critical in our minds that people understand that. We’ve targeted the more sophisticated private investor, as this is not an off-the-shelf product.”At the end of the concession, the asset is transferred to Crown ownership at zero cost.

Initially NZSIF investors are being asked for 10% of their committed money as initial capital, with the other 90% being called in as more asset investments are made.

Coman said PIP is currently carrying out due diligence on two transactions, “and it’s nice to think that within the next six months we’ll have made our first investment and made a new call on investors’ money.”

The NZSIF shares will not be listed on the NZX, but Craigs will provide an order matching facility for potential buyers and sellers.

[winner69]

Didn't realise the man from Paraparaumu had so many clients ..............