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B. G., Opalesque Geneva: The NZ Superannuation Fund (NZS), aka the NZ Super Fund, announced in its latest shareholder newsletter last week that it had invested US$100m in the flagship of global investment manager Episteme Capital. The flagship in question is called the Systematic Quest Total Return programme and is a systematic global macro strategy that trades liquid futures and foreign exchange markets.
Episteme Capital was formed in 2009 and has offices in the UK and the US. The three founding principals, Adrian Eterovic, Richard Leahy and Gustavo Lau, ran JWM Partners prior to Episteme and worked at Long Term Capital Management and Salomon Brothers in the 90s.
"This investment is a hedge fund strategy that fits into the Fund's global macro opportunity, alongside incumbent managers Bridgewater and Citadel," says NZS' newsletter. The Fund expects global macro strategies to be market-neutral and to produce uncorrelated returns over the course of market cycles.
The Eurekahedge Macro Hedge Fund Index is up 1.4% YTD after returning 0.3% in April. The main Hedge Fund Index is up 2.4% YTD.
NZS also made USD$150m in new commitments to existing manager Columbia Capital, a venture capital firm based in Alexandria, VA, and founded in 1989. Their funds invest in the communications and technology industry and focus on building and developing businesses in the digital infrastructure, enterprise technology and mobility space.
In its market outlook, NZS said: "Looking ahead, world markets remain focused on the impact of central bank policy action and the likelihood, timing, and depth of economic recessions across developed markets."
The Fund invests money on behalf of the New Zealand Government to help pay for the cost of universal pension.
Investments in trend-following, infrastructure and climate
A 2022 manager hires list from NZS reveals a handful of fresh names including systematic manager Man AHL, which is NZS's first foray into the trend-following investment style, according to Investment News New Zealand.
"We approved a new investment opportunity, 'Trend', last year. Trend exploits the observed persistence of price changes across a broad range of markets over time," a spokesperson told the news site. "The driver of excess returns are investor behavioural biases which lead to autocorrelated returns in markets. To access this new opportunity, we placed an investment in Evolution and Pure Momentum Plus funds managed by Man AHL in December 2022. We anticipate adding to our Trend exposures in 2023."
The HFRI Trend Following Directional Index is down 2.1% YTD after returning +1.3% in April.
NZS will co-invest in infrastructure assets with Netherlands-based APG, one of the world's largest pension funds. The Super Fund also made allocations to the Wellington Climate Innovation Fund, the Al Gore-founded Generation Sustainable Solutions Fund, the Copenhagen Infrastructure Partners' wind farm project and forestry giant Timberland. It invested in the PIMCO Carbon Credits fund as well as bespoke real estate and infrastructure strategies run by Canadian manager Slate.
American fixed income manager PIMCO runs a GIS Climate Bond Fund launched in September 2020, which returned 2.2% in Q1-23.
The NZ$62bn (US$39bn) NZ Super Fund, which is run out of Auckland, New Zealand, was recently ranked as the top-performing sovereign investor globally over the last 10 years by Global SWF.
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