End of Year Interview with NZSF CEO Adrian Orr
Posted on 01/28/2011
This interview appears in the 4Q Y2010 issue of the Sovereign Wealth Quarterly.
New Zealand Superannuation Fund End of Year Questions with CEO Adrian Orr
1. Is the current global market providing a positive investment environment for your fund, and what type of changes would you like to see?
Yes, it is a positive environment for a long-term investor. This is because in general, investors are uncertain and cautious, there is continued volatility across key asset markets. This provides a good opportunity to remain focussed on long-term value investing and also to utilise some of the shorter-term, more opportune, investment strategies.
Such an environment enables both good long-term buying opportunities in less liquid markets as well as value-add opportunities. The uncertain/volatile environment is fortunately underpinned by improving economic fundamentals in some key developed markets in terms of real growth and employment, albeit masked by ongoing balance-sheet restructuring at national levels. Again, this provides medium-term confidence with shorter-term investing opportunities.
2. Will 2010 go down in history books as a good or a bad year for sovereign wealth funds, and why? How did 2010 impact your fund?
In general terms, it was a very positive year for financial returns and value-add – especially relative to expectations post-2009. It was also a positive year for displaying the value of remaining focused on the long term and true to your investment beliefs.
However, some SWFS experienced less positive knock-on effects – principally, via sizeable unplanned withdrawals – of serious adverse impacts on the fiscal positions of their host governments.
3. Assuming that sovereign wealth funds have undergone many changes in the past few years have these changes been positive or negative? Why?
Largely positives:
• Ongoing GAPP (‘Santiago’) adoption and implementation
• SWFs communicating and working together
• Market conditions displaying value of long-term investment
• SWFs working together on Responsible Investment issues and other related issues around broader investment behaviour and service provision e.g., fees.
4. Does your fund have any New Year’s Resolutions, What are they?
Nothing new as you might expect from a committed long-term investor. And in fact the last two years have reinforced the importance of remaining true to one’s investment beliefs (and of being clear with your stakeholders and so managing their expectations about the potential short-term consequences of doing so).
5. What is going to happen in the sovereign wealth fund environment in 2011?
We believe there will be a more steady environment.