An ethical failure

The Greens want the Superfund to only invest in ‘ethical’ companies. They want to make sure that there are no investments in tobacco, gambling, armaments…instead they say that the Superfund should invest in things like green-tech.

You know, like wind turbine companies.

The New Zealand Superannuation Fund has completely written off the value of its investment in US wind turbine company Ogin which is in the process of being wound down.

The Super Fund invested $US55 million ($NZ78 million) in Massachusetts-based Ogin in 2013 to give the US start-up capital to develop new products before going public, of which $US25 million was debt and $US30 million was equity.  

Those plans didn’t come to fruition and after Ogin failed to raise more capital last year, the Super Fund wrote down the investment to nil in June 2016, which had been valued at $NZ47.5 million.

The debt portion was repaid in 2014 and the Super Fund injected a further $US3.8 million.

Ogin recently sold the wind turbine applications platform to Danish wind turbine maker Vestas, and the Super Fund said Ogin’s remaining assets are being divested and it’s being wound down.

Commercially this has not been a successful investment for the NZ Super Fund and we are disappointed with the outcome,” chief investment officer Matt Whineray said.

“We went into this investment knowing that the company was early-stage. We accepted that because of the earlier stage investment there were a broader range of possible outcomes associated with the potential for high returns.”

The Ogin investment barely dented the fund’s returns, representing just 0.2 per cent of its $30.1 billion portfolio at the time of the write-off.

Since then, the fund has expanded to $34.1 billion as at March 31.

Mr Whineray said the fund still sees long-term value in alternative energy.

It is right about now that I think that someone should tell any politician who bangs on about green-tech and ‘ethical’ investing to go fly a kite.

I couldn’t care less about these so-called ‘ethics’. I want our Superfund to maximise their returns and I don’t care how they do it.




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