Exclusive interview with Sian Orr, Director, Private Equity & Alternatives, NZ Super Fund
GLOBAL INVESTMENT INSIGHTS
“As private markets continue to evolve, we believe long-term success will come from combining patience, strong partnerships and the flexibility to adapt as opportunities change.”
Sian Orr, Director, Private Equity & Alternatives, NZ Super Fund
Sian is a Director in the Private Equity & Alternatives team at the Guardians of the New Zealand Superannuation Fund (NZ Super Fund or the Fund), where she plays a leading role in shaping and implementing the Fund's global private equity programme.
The Fund invests government contributions and manages a global portfolio of investments with the objective of partially offsetting the cost of universal superannuation payments into the future. The Fund currently has around NZ$96 billion (~A$78 billion) in assets under management.
Sian’s responsibilities span portfolio construction, investment strategy, manager selection, co-investment execution and the ongoing governance and optimisation of investments across buyout, growth and venture capital. She also has significant governance and stakeholder responsibilities.
Sian represents the Fund on a number of Limited Partner Advisory Committees and provides governance oversight of Elevate, New Zealand's government-backed venture capital fund-of-funds programme. She regularly engages with the Guardians' Investment Committee and Board, senior investment partners and government stakeholders, and has previously served as Investment Committee Secretary and as a rotational voting member of the Committee.
In this exclusive interview with Global Investment Institute, Sian shares how she thinks about portfolio construction, manager selection and the way the Fund’s global Private Equity (PE) program needs to evolve as market conditions change; the growth in the investable PE universe that has seen the opportunity set become larger, more competitive and more specialised; and why the evolution of private markets necessitates a flexible investment approach, strong partnerships and a long term-perspective to achieving success. Sian also discusses how the Fund approaches investing in PE through the Total Portfolio Approach (TPA) lens, assessing how an opportunity impacts the portfolio’s expected return, risk and liquidity characteristics. Finally, Sian shares what she looks for in a manager and what defines a successful partnership.
Q. What are the key areas of focus for you currently in your role as Director, Private Equity at NZ Super?
A. Number one is continuing to build a high-quality global PE programme that can deliver strong long-term returns for New Zealanders. I spend much of my time on portfolio construction, manager selection and thinking about how our programme should evolve as markets change.
Over the past few years, we have rebuilt our buyout programme from the ground up, appointing new partners that broaden our access to attractive segments of the market. We're now actively assessing how the PE landscape is evolving as higher interest rates, longer holding periods and a more challenging exit environment create both risks and opportunities for investors. We’re also expanding our co-investment programme, strengthening our ability to underwrite investments at the asset level and considering how direct PE investments can complement our broader portfolio.
My role also encompasses governance and stakeholder management. That includes overseeing Elevate, New Zealand's government-backed venture capital fund-of-funds programme, supporting the Investment Committee and Board and maintaining strong relationships with managers, co-investors and industry partners around the world.
Q. As the trend towards ‘private for longer’ accelerates, what are the key trends you are observing and how is that impacting the way you invest in private equity opportunities?
A. One of the most notable is the continued expansion of the investable universe outside public markets. The market has become larger, more competitive and more specialised. We're seeing dispersion between managers, an increasing importance of sector expertise and a growing emphasis on operational value creation rather than financial engineering. The higher interest rate environment has only reinforced this trend.
In response, we're building our exposure to small and mid-market buyout opportunities, where we see greater market inefficiencies, stronger alignment and exit options that aren't solely reliant on IPOs.
We're also monitoring the growth of the continuation vehicle market. We see continuation vehicles as having the potential to provide exposure to proven assets at a later and potentially lower-risk stage of the ownership cycle, while still offering meaningful upside from future growth.
As private markets continue to evolve, we think maintaining flexibility, strong partnerships and a long-term perspective will remain critical to generating attractive outcomes.
Q. What drivers are underpinning NZ Super’s focus on global PE opportunities and where are you looking to focus the expansion of your PE programme geographically?
A. We believe that different parts of the market provide distinct sources of long-term value creation. Venture capital gives us exposure to innovative businesses at an early stage of development, growth equity provides access to companies scaling rapidly with proven business models and buyout enables active ownership of more mature businesses where operational improvements, strategic acquisitions and strong alignment between owners and management can drive value.
Most of our deployment over the coming years will be at the buyout end of the spectrum. Our research suggests that outperformance is driven less by leverage and more by the ability of skilled owners to accelerate revenue and earnings growth through active ownership and value creation initiatives.
Geographically, we are opportunity-led rather than target-driven. Our focus is primarily on North America and Europe, while remaining open to opportunities across APAC and continuing to invest meaningfully in New Zealand. Within these markets, we are particularly attracted to the small and mid-market segment.
Q. What are the main headwinds and risks facing the private equity investment landscape, and how are you navigating these and positioning your portfolio for the future?
A. One of the biggest is the slowdown in exit activity. IPO markets have been subdued for several years and there is now a significant stock of mature assets that have been held for longer than originally anticipated.
This has created pressure on distributions and encouraged the development of alternative liquidity solutions such as secondaries/continuation vehicles. We also operate in an increasingly competitive market, with thousands of managers competing for capital and opportunities. In that environment, manager selection, differentiation and repeatability of track record become increasingly important.
We're also watching closely the impact of AI, particularly across technology and software, where a significant proportion of private equity value creation has historically occurred. AI will create both opportunities and disruption: understanding the implications for portfolio companies will be critical.
Finally, some 2021 and 2022 vintages remain challenged, reflecting acquisitions made at peak-cycle valuations.
Q. How do you think about the role of private market and alternative allocations within NZ Super’s total portfolio approach?
A. The Total Portfolio Approach (TPA) makes us think about every investment in the context of its contribution to the overall portfolio, rather than through the lens of a predetermined asset allocation. The key question is whether an opportunity improves the portfolio's expected return, risk and liquidity characteristics. Private markets provide access to opportunities that are often unavailable in public markets.
One of the more interesting challenges is the natural tension between private markets and a TPA. In theory, capital should flow to the most attractive opportunities at any given point in time. In practice, successful PE investing requires patience, consistency and long-term commitment. Relationships can take years to build, capital is deployed gradually to achieve vintage diversification and investments may take six to ten years to fully realise their value.
Managing that balance is as much an art as a science. It requires close communication between our deployment teams and asset allocation team to ensure we remain responsive to changing opportunities while preserving the discipline needed to build successful long-term private market programmes.
Q. What are the main characteristics you look for when partnering with an external manager that distinguish a successful vs unsuccessful partnership?
A. For us, a successful partnership starts with alignment, consistency and trust. We look for managers with a well-defined, enduring strategy, a credible track record and a clear understanding of where their returns come from. That track record should reflect performance across multiple companies and cycles, supported by a repeatable value-creation approach rather than a small number of outliers or excessive reliance on leverage.
We also spend considerable time assessing the organisation itself, including its ownership, culture, team depth, succession planning, and processes. Alignment is critical, both financially, through carry structures and meaningful GP commitment, and behaviourally, through transparency, disciplined growth and access to co-investment.
The best partnerships are those where both parties communicate openly, including when things are not going to plan, and remain focused on long-term outcomes. Less successful partnerships often involve strategy drift, rapid fund or deal-size growth, weakening alignment, key-person dependency or communication that becomes less transparent when performance is challenged.
Sian Orr, Director, Private Equity & Alternatives, NZ Super Fund
Sian Orr is a Director in the Private Equity & Alternatives team at the Guardians of New Zealand Superannuation Fund (NZ Super Fund or the Fund), where she plays a leading role in shaping and implementing the Fund's global private equity programme.
Her responsibilities span portfolio construction, investment strategy, manager selection, co-investment execution and the ongoing governance and optimisation of investments across buyout, growth and venture capital.
Sian also has significant governance and stakeholder responsibilities. She represents the NZ Super Fund on a number of Limited Partner Advisory Committees and has provides governance oversight of Elevate, New Zealand's government-backed venture capital fund-of-funds programme. She regularly engages with the Guardians' Investment Committee and Board, senior investment partners and government stakeholders, and has previously served as Investment Committee Secretary and as a rotational voting member of the Committee.
Sian is a regular speaker at private capital industry events and has represented the NZ Super Fund at forums including AVCJ, New Zealand Private Capital and the i3 Property Forum. She has also been featured in Private Equity International discussing the Fund's private equity strategy and portfolio development.
Before joining the Guardians in 2019, Sian was a Manager in PwC's Treasury Advisory practice in London, advising major corporates on treasury strategy, governance, liquidity, financial risk and transaction-related matters. Earlier in her career, she held roles with the New Zealand Treasury and Deloitte Australia.
Sian holds a Master of Commerce in Finance from Macquarie University and a Bachelor of Commerce and Administration in Economics from Victoria University of Wellington.
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