The New Zealand Superannuation Fund has initiated a plan to invest in alternative energy with a US$50m (€36.6m) direct investment in unlisted fuel cell maker Bloom Energy, the company behind the ‘Bloom Box’ solid oxide fuel cell device.
The investment was made as part of the NZ$23bn (€14.2bn) fund’s newly disclosed investment pact with Canada’s Alberta Investment Management Corporation (AIMCo) and the Abu Dhabi Investment Authority (ADIA).
The funds agreed late in 2012 to get together to invest in growth capital opportunities globally, working with Kleiner Perkins, the Silicon Valley venture capital firm. The agreement is called the ‘Innovation Alliance’.
The Bloom Box, the Bloom Energy Server, can use a variety of fuels to generate electricity on-site using technology developed for Nasa’s Mars landers. Sunnyvale, California-based Bloom, founded in 2001 by KR Sridhar, has clients including Google, Walmart, AT&T, eBay, Staples and Coca-Cola. Bloom has reportedly absorbed more than $1.1bn in venture capital funding and is aiming to become profitable this year.
NZ Super’s investment has grown out of work on climate change the fund completed in 2011, which has seen it prioritise investments in alternative energy and lower carbon energy. “Our investment in Bloom Energy…is an example of the energy strategy in action,” it says in its new annual report.
Directors at Bloom include former US Secretary of State Colin Powell, who’s a partner at Kleiner Perkins, Jagdeep Bachher, Deputy Chief Investment Officer of AIMCo, and Kleiner Perkins partner John Doerr, who funded the initial investments in Bloom.Also on the board is Eddy Zervigon, the former Managing Director in the Principal Investments Group at Morgan Stanley, who represents the investment bank’s interests.
NZ Super CEO Adrian Orr said the fund was interested in opportunities to invest in innovative technology where its “long investment horizon would allow companies to grow before going to the public markets”.
Elsewhere in the report, the fund says its future priorities include incorporating ESG into company analysis and stock selection as part of its new internal New Zealand active equities mandate. It also wants to implement a new “road-map” for integrating ESG across the investment teams and into “opportunity search and selection”.
It’s also working towards more focused direct engagements with global and New Zealand companies – and evaluating outcomes.
During the year, NZ Super conducted a responsible investing review of its external managers, to establish a new baseline for ESG integration and understand and assess the quality of managers’ RI activities. Forty-four managers were assessed; 15 managers improved their ESG practices since they were last reviewed in 2011. There was in general “a much greater willingness to recognise and manage ESG risks and opportunities”.
The fund also revealed that it has terminated four managers: AQR Capital Management, LSV Asset Management, Numeric Investors and Thompson, Siegal & Walmsley.