NZ Super Fund to invest US$100 million in climate mitigation and adaptation

Wellington Management’s Climate Innovation Fund I (“CIF”) seeks to generate non-concessionary venture capital/growth returns by investing in Series B and C rounds of financing at the time of initial investment, predominately across North America and Europe. Target sectors include energy transformation, sustainable buildings and cities, transportation and mobility, industrial and enterprise efficiency, and food and agriculture.

Del Hart, Head of External Investment and Partnerships for the Guardians of New Zealand Superannuation, the manager of the NZ Super Fund, said CIF’s dual focus on financial returns and positive environmental impacts matched the NZ Super Fund’s own sustainable investment philosophy and objectives.

“Wellington’s research-led investment process, including its partnerships with the likes of Woodwell Climate Research Center and the Joint Program on the Science and Policy of Global Change at the Massachusetts Institute of Technology also aligns with our approach,” said Ms Hart.

Ms Hart said the NZ Super Fund’s involvement with CIF could potentially expand to include co-investments in successful portfolio companies.

The NZ Super Fund’s investment in CIF follows similar investments in the Fifth Wall Climate Technology Fund and Generation Investment Management’s Sustainable Solutions Fund IV.

In June this year, the NZ Super Fund shifted about 40% of its overall investment portfolio to market indices aligned with the Paris Agreement in order to further reduce its portfolio’s carbon footprint and deliver improved ESG outcomes.

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Wellington Management is one of the world’s largest independent investment management firms, serving as a trusted adviser to over 2,400 clients in more than 60 countries. Wellington has a long track record of investing across multiple sectors of private equity bringing expertise across each stage of the business lifecycle. The firm manages more than US$1 trillion globally in assets under management, with US$7 billion in private equity across the consumer, technology, health care, financial services, biotechnology, and climate technology sectors, as of 31 October 2022

The NZ Super Fund invests money on behalf of the New Zealand Government to help pay for the increased cost of universal pension entitlements in the future. By doing this the Fund adds to Crown wealth, improves the ability of future Governments to pay for universal pensions, and ultimately reduces the tax burden on future New Zealanders. A long-term, growth-oriented investor, the Fund has around NZ$60 billion (US$43 billion) in assets. The Fund is managed by a Crown entity, the Guardians of New Zealand Superannuation.