Kiwisaver is now a billion-dollar industry. The Discussion Document suggests that the utility of Kiwisaver could be improved if Kiwisaver funds could be invested in “private assets”. The Discussion Document does not explicitly consider the legal structure of the proposed assets; however, it refers to assets that are perhaps niche or illiquid. This reference may potentially include private equity investments, or perhaps land developments.

The Discussion Document sets out several regulatory changes that could be made to encourage a wider range of Kiwisaver investments. In CA ANZ’s view, if the proposed regulatory amendments are to proceed, the Government should also consider if the PIE eligibility criteria present an additional barrier. Whether amendments are needed will depend on the types of investment envisaged by the Discussion Document.

Additionally, PIEs may invest into debt or equity assets so may currently be invested in private equity projects. However, the extent of their investment in public-private partnerships or large-scale assets remains unclear.

The second of the amendments proposed in 2024, which restricts PIE eligibility when a fund derives only interest income from an associate that is not eligible to be a PIE, may also need revision.