Hot on the heels of the passage of new gun laws in New Zealand, the NZ Super Fund has divested all companies involved in the manufacturing of automatic and semi-automatic weapons.
The fund confirmed companies involved in the manufacture of civilian automatic and semi-automatic firearms, magazines or parts prohibited under New Zealand law were excluded from the $41 billion fund. In total, $19 million of investments will be divested.
The fund said the decision of the Guardians of New Zealand Superannuation - the crown entity managing the fund - was a reflection of the passing of the Arms (Prohibited Firearms, Magazines and Parts) Amendment Bill, which sailed through the New Zealand Parliament with 119 votes for, and just a single against.
The fund said the Guardians' Responsible Investment Framework required decisions about ethical exclusions to consider New Zealand law.
NZ Super said the Guardians worked with MSCI ESG Research to identify companies captured under the new exclusion, and will divest $19 million of investments in:
- American Outdoor Brands Corporation
- Daicel Corporation
- NOF Corp
- OLIN Corp
- Sturm, Ruger & Company
- Vista Outdoor Inc.
Separately, the ongoing growth of digital data has spurred the fund to invest in digital infrastructure, with up to US$115 million to be invested in data centres across the United States.
The fund said its investment - which was being made alongside vehicles managed by real estate infrastructure owner and operator CIM Group - would include potential access to CIM's pipeline of future data centre transactions, as well as its existing portfolio of six data centres.
NZ Super head of external investments and partnerships Del Hart said data centres offered "strong, infrastructure like returns," and were underpinned by "exponential" growth in data. She added that by 2021 data volumes are expected to be nearly three times 2016 levels.
"We are seeing increasing customer demand for offsite data centres as enterprises either shift data management to third party providers or move to the cloud," Hart said.
The fund confirmed its investment is not in data centre operation, but in the leasing of data centre facilities and infrastructure right across North America, including in San Francisco, Chicago and Toronto. It also holds a 39% stake in Datacom, a NZ based company with a network of data centres in Australia and New Zealand.
CIM co-founder and principal Avi Shemesh said the market demand for flexible datacenter space was increasing and the firm believes its portfolio would serve both existing technology and enterprise tenants and new customers. CIM will operate the investment on behalf of NZ Super.