VIDEO: Fiona Mackenzie of New Zealand Superannuation Fund

"We will increasingly use private equity managers where we don't have in house capabilities so I would expect more emphasis on managers for non-Australasian investment, but it depends on what opportunities come down our research pipeline,"she says.

At present, NZ Super has three relationships in emerging Asia - one generalist fund and two real estate funds, covering China and India, respectively. Private equity falls under the group's unlisted mandates allocation, which includes real estate, with about $1 billion in total commitments. The portfolio is skewed towards New Zealand due to a large historical exposure to real estate. For private equity alone, 75% of the portfolio is offshore.

NZ Super launched 10 years ago and its private equity program is only five years old. Having initially accessed the asset class through fund-of-funds, it took on an advisory relationship in 2009 and started investing in GPs directly. Two years later it implemented a new investment framework at which point the approach became more opportunistic. 

"We no longer have a target allocation to private equity as an asset class; we think of private equity as a way to access underlying investment opportunities so it makes us a little different in that one year me might not be making any private equity investments and another year we might make a lot,"Mackenzie explains.

NZ Super has dipped its toe into co-investment - it completed one domestic deal and operates a co-investment vehicle in China with two counterparts - but capacity is limited by the small team size and its relative isolation in New Zealand. Rather, Mackenzie sees the key development in the next few years as the amount the group is prepared to commit to individual managers.

"Historically, our average check size has been NZ$25-30 million because we had some small early investments,"she says. "But in the future we wouldn't be looking to do anything less than $100 million for a single manager."

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