1 Sep 2011

Strong demand expected for SOE shares - fund manager

6:53 am on 1 September 2011

A fund manager says a severe lack of big, high quality investment opportunities, should have New Zealanders lining up for shares in State-owned assets.

The Government is proposing to sell minority stakes in five State-owned enterprises, including Solid Energy and Meridian, if it wins the general election on 26 November.

Tower Investment chief executive Sam Stubbs says Tower would repatriate money from investments offshore to buy in to the state-owned assets.

Mr Stubbs says he would expect capital markets to be surprised by the degree of domestic demand.

He says only the Government has long duration, inflation hedged, large sized assets.

Mr Stubbs says in the last five years there has been a pool of net new investment money established in New Zealand in terms of KiwiSaver funds and iwi grouping together to become a single investment force.

He says the Government can now sell sizeable chunks of New Zealand assets to buyers who are New Zealanders and have considerable financial means to bring to this.

Finance Minister Bill English says he expects New Zealanders will end up owning 85 to 90% of the companies, including the Government's cornerstone shareholding of at least 51%.

It's also considering imposing a maximum cap on the size of any investor's shareholding, probably of 10%.