Fisher Funds set to be biggest KiwiSaver PE player

Fisher Funds has earmarked $1 billion of its KiwiSaver funds to be invested into private equity over the next few years. The fund manager, which has $17 billion of KiwiSaver funds, has invested some funds into private equity already but is changing its strategy.

Up until now it has invested locally using the likes of like Movac, Pioneer and Direct Capital. Now it is planning to invest much more into global, mid-market private equity.

Private equity investments will be added to its Growth, Balanced, and Equity KiwiSaver funds, and will be part of the Aggressive Fund in late 2025.

Fisher Funds chief investment officer Ashley Gardyne says his team will take an active role in supporting its portfolio companies in New Zealand, providing strategic guidance alongside financial backing.

“We’re targeting established companies with strong leadership, a clear growth trajectory, and a need for capital and partnership to take them to the next level.”

One of the drivers for investing in private equity locally is the shallowness of New Zealand's listed stocks. As a significant investor into NZX list companies Fishers is getting limited in how much more exposure it can take on to listed companies.

Gardyne says private equity is well-suited to KiwiSaver because both are about building wealth over the long-term.

He says while listed investments are likely to deliver 7-9% returns annually, he expects private equity to be up around the 15% mark.

This, he says, could add an additional $100,000 to a KiwiSaver members balance over the long term.

“We believe it’s the right time to scale that up, particularly in international growth markets, while also backing ambitious New Zealand businesses.

“We’ve been deliberately building our capabilities in this space by investing in a specialist in-house private equity team led by Michael Walmsley to ensure we’re set up for long-term success,” says Gardyne.

The team of two is likely double as the allocation to private equity grows.

Gardyne says some Australian superannuation funds have 20% allocations to private markets, compared to about 2% in KiwiSaver. at present.

He feels that a 10% allocation "feels about right" for KiwiSaver funds.

“These asset classes have a long history of giving the opportunity for higher returns, than public markets. Even an extra 0.5% return per annum on your KiwiSaver investments could result in tens of thousands of extra dollars in retirement,” says Gardyne.

While private market investments have their own unique risks including valuation and liquidity, Gardyne says these can be managed carefully, and believes the benefits outweigh the risks. 

“Super funds around the world have been investing in private markets successfully for many years,” says Gardyne. “We’re now ensuring New Zealand investors can share in those opportunities.”