The New Zealand Super Fund has written down its US$37.8m (€30.7m, NZ$47.5m) investment in early stage US wind turbine company Ogin.
NZ Super went into the company in November 2013 as part of a plan to invest more broadly in early stage companies. Other such investments have included exposure to advanced fuel cell technology (Bloom), carbon recycling (LanzaTech) and high-tech glass (View).
But Ogin is now being wound down following a recent transaction with global wind energy leader Vestas.
While the fund was pleased the Vestas deal provides a home for Ogin’s wind turbine platform for applications greater 100 kW, NZ Super Chief Investment Officer Matt Whineray admitted “commercially this has not been a successful investment for the NZ Super Fund, and we are disappointed with the outcome”.
The fund says it remains committed to investing in early stage companies.
The Ogin investment was made through the Innovation Alliance, a small group of institutional investors – including Canada’s Alberta Investment Management Corporation (AIMCo) and the Abu Dhabi Investment Authority – looking to invest in expansion capital opportunities globally.“We went into this investment knowing that the company was early-stage,” Whineray added.
“We accepted that because of the earlier stage investment there were a broader range of possible outcomes associated with the potential for high returns. Our decision to invest was based on a wide range of supporting expert evidence and we continued to support the company for a number of years.
“We are disappointed with the outcome”
“In the first half of 2016, the company was unable to raise the growth capital needed to continue on the path towards commercialization. In June 2016 the Ogin Board of Directors and management mutually agreed to separate. At that point we wrote the Fund’s NZ$47.5 million investment down to nil, and that was included in our annual accounts.”
It is being stressed
it has not had a material impact on returns, with the NZ$47.5m representing just 0.16% of the NZ$30.1bn fund. And Whineray said the fund continues to see long-term value in investing in alternative energy.