December 8, 2014 / 12:05 PM / 3 years ago

NZ superfund invests in U.S. alternative energy start-up

WELLINGTON, Dec 9 (Reuters) - New Zealand’s Superannuation Fund on Tuesday said it would invest $60 million in a U.S. gas fermentation company as the state pension fund increases its exposure to alternative energy and start-up companies.

As part of its investments to provide expansion capital to new, private companies, the $21 billion pension fund will invest in Lanza Tech, a Chicago-based company which processes waste gas from steel mills into ethanol and other high-value fuels and chemicals.

“We are actively diversifying into alternative and non-conventional energy, alongside traditional energy investments,” Nigel Gormly, NZ Super Fund Head of International Direct Investment, said in a statement.

The Lanza Tech investment puts the super fund’s expansion capital investments at around 1 percent of total assets under management, and follows earlier investments in U.S. alternative energy firm Bloom Energy and wind turbine manufacturer Ogin Inc.

Set up in 2003 to partially fund the cost of future pension payments for New Zealand’s 4.5 million people, the Superfund has a mandate to offer returns at least 2.5 percent on average above the risk-free 90-day New Zealand Treasury bills.

Since its launch, the fund has made annual returns of 9.9 percent. ($1 = 1.3086 New Zealand dollars) (Reporting by Naomi Tajitsu; Editing by Shri Navaratnam)

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