Based on NZ Treasury projections the Fund is not expected to peak in size as a percentage of GDP, until the 2070s. This makes us one of a very few genuine long-term investors globally.
As a long-term investor we can exercise more control over the Fund's capital than investors with shorter investment horizons. We have the luxury of being able to pick our investment horizon, and are less likely to need to sell assets in response to short-term falls in market value than they are. This is an important competitive advantage or endowment.
As long-term investors we can:
- engage in opportunistic or contrarian investing, by buying assets when others are forced to sell and prices are falling, or by selling when prices are rising;
- invest in illiquid assets, for example, forests, infrastructure and private (unlisted) companies. These assets can be difficult to sell quickly. This means that they are not suitable for all investors, but are expected to deliver a premium over time;
- engage in long-term partnerships with like-minded investors;
- benefit from a wider selection of assets than are available to short-term investors;
- tailor investment strategies to benefit from and protect the portfolio against long-term investment themes.