KiwiSaver investment in unlisted assets welcomed

FSC supports KiwiSaver investment in unlisted assets to boost local growth

KiwiSaver investment in unlisted assets welcomed

The Financial Services Council (FSC) has expressed strong support for enabling KiwiSaver funds to invest in unlisted assets, such as infrastructure projects and New Zealand businesses.

The move is seen as a vital step toward strengthening domestic economic growth and invigorating local capital markets.

FSC CEO Kirk Hope emphasised the significance of the initiative for the country’s financial future.

“KiwiSaver plays a crucial role in the financial wellbeing and retirement of New Zealanders, with over $120 billion currently invested,” Hope said. “However, the majority of these funds are currently invested offshore, providing limited benefits to the local economy.”

Unlocking capital for domestic growth

Currently, a significant portion of KiwiSaver investments are held in offshore markets, offering limited support for New Zealand’s economic development.

FSC believes that directing KiwiSaver funds toward unlisted local assets has the potential to unlock substantial capital and generate positive economic outcomes.

“By enabling KiwiSaver investments in unlisted assets, such as infrastructure projects and innovative New Zealand businesses, we can unlock substantial capital for domestic growth,” Hope said.

This reform is expected to provide two key benefits:

  1. Supporting local innovation: Kiwi businesses will gain access to the capital needed to innovate, expand, and compete on a global scale.
  2. Improving diversification: For KiwiSaver members, investing in unlisted assets offers a broader range of opportunities, improving portfolio diversification.

“This reform will not only provide Kiwi businesses with much-needed capital to innovate and expand but the opportunity of greater diversification for KiwiSaver,” Hope said.

Collaborating for a stronger retirement future

FSC reiterated its commitment to working alongside the government and other industry stakeholders to ensure KiwiSaver evolves to meet its intended purpose – delivering dignified retirements and improving the financial confidence of New Zealanders.

Recent data from Westpac NZ revealed that thousands of KiwiSaver members who shifted to conservative funds during the COVID-19 pandemic are still missing out on potential gains. Recent study from the Financial Markets Authority (FMA), meanwhile, showed that while most KiwiSaver providers are prepared to manage their exposure to commercial real estate, improvements are needed in both risk mitigation and communication.

Read FSC’s full media statement here.

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