Finance Minister Michael Cullen today allowed the Earthquake Commission to diversify its $4 billion Natural Disaster
Fund to include up to 35 percent in global equities.
“It makes sense for the EQC to hold assets off shore,” Dr Cullen said.
“In the event of a major earthquake, these investments would provide an important buffer as they would hold their value
and could be sold quickly.”
The remainder of the Fund would continue to be held in New Zealand in government stock and cash.
"EQC will be required to invest the Fund on a prudent, commercial basis,
consistent with best practice portfolio management.
“It will be required to maximise the return on its investment without undue risk to the Fund as a whole and without
endangering New Zealand's reputation
as a responsible member of the world community.
"The Commission will now work with its advisors to construct a suitable
portfolio and appoint global equity managers," Dr Cullen said.
Ends