NZ Super Fund congratulates Bloom Energy on IPO
POSTED ON: 25 July 2018
The NZ Super Fund has congratulated Bloom Energy on its initial public offering on the New York Stock Exchange.
“The public listing is a significant milestone for Bloom Energy as it works to deliver sustainable on-site electricity to organisations around the world,” said Acting Chief Investment Officer Mark Fennell. “We look forward to supporting Bloom Energy as a listed entity for mutual benefit.”
Mr Fennell acknowledged that Bloom Energy, while performing strongly on listing (up 67%), was currently priced below the level at which the NZ Super Fund initially invested in the company.
“As a long-term investor the NZ Super Fund’s primary focus is on what we buy an asset for and the value we ultimately realise. Our investment returns will only crystallise when we sell our stake. What our investment is worth at various interim time periods is not as important to the NZ Super Fund as it is to investors with a shorter investment horizon.”
The Fund’s other expansion capital investments include stakes in View Glass, LanzaTech and a joint venture investment in Longroad Energy, as well as mandates with a number of New Zealand investment managers.
“We have been very clear that these expansion capital investments are at the riskier end of the spectrum. In any portfolio there will be some investments that perform better than others, especially over short time frames. What matters most is the overall performance of the overall portfolio. Individual asset risk is managed by diversification at a whole-of-portfolio level.”
“Expansion capital investments, such as this one, are an appropriate part of the mix for a long-term investor seeking to maximise returns. We are continuing to seek new investments in alternative energy and infrastructure that will benefit from the rapidly changing energy sector globally.”
The NZ Super Fund’s USD100m investment in Bloom Energy, which was made over 2012-2014, has converted to 2,587,991 unlisted Class B shares, representing approximately 2.4% of the total common stock in the company. These Class B shares, which have enhanced voting rights for up to five years, are subject to a lock-up agreement, meaning the NZ Super Fund is restricted from selling them for 180 days. They can be converted into listed class A shares at any time and convert automatically upon being transferred or in certain other circumstances.
The IPO involved less than 20% of Bloom Energy’s equity.
To put the size of the Bloom Energy investment in context, the overall NZ Super Fund, as at end May, stood at $38.9b – $3.9 billion bigger than it was a year ago. Expansion capital investments make up between 1.5% - 2.0% of the total NZ Super Fund.
The NZ Super Fund is a global investment fund established by the New Zealand Government to help pre-fund universal superannuation. A long-term, growth-oriented investor, the Fund has returned 10% per annum since inception in 2003. For more information see www.nzsuperfund.co.nz.
Media contact: Catherine Etheredge, Head of Communications, NZ Super Fund, [email protected] , + 64 9 366 4905