Auckland, New Zealand: The New Zealand Superannuation Fund has made a US$60 million equity investment in leading gas fermentation company LanzaTech. Founded in New Zealand in 2005 and now headquartered in Chicago, LanzaTech turns waste gas from steel mills into ethanol and other high value fuels and chemicals.
“LanzaTech is one of the most exciting companies New Zealand has produced, with significant global potential,” said Nigel Gormly, NZ Super Fund Head of International Direct Investment. “We’re proud to continue the New Zealand connection and to be able to assist in LanzaTech’s ongoing growth.”
LanzaTech CEO Jennifer Holmgren said: “as we continue on our path to commercialisation, we are tremendously excited to include the NZ Super Fund as one of our investors. Our roots and hearts are in New Zealand, and this investment will allow us to expand and develop our global platform, increasing our ability to play a part in New Zealand’s energy future.”
The LanzaTech investment is one of a series of ‘expansion capital’ investments made by the NZ Super Fund in recent years, providing capital to privately-owned, early-stage companies that are seeking to grow, but are not yet ready to list on the public markets.
While only around 1% of the overall NZ Super Fund is invested in expansion capital, Mr Gormly says it is appropriate that it is part of the mix. “The Fund is well diversified and expansion capital’s risk/return profile is a good match for growth-oriented investors with a long time horizon.” Previous NZ Super Fund expansion capital investments include stakes in United States companies Bloom Energy and Ogin, Inc. In New Zealand, the Fund invests in expansion capital via investment managers Pencarrow Private Equity, Pioneer Capital Partners and Waterman Capital.
Mr Gormly said the Fund was also attracted to LanzaTech because of the exposure it provides to the waste-to-energy sector. “We are actively diversifying into alternative and non-conventional energy, alongside traditional energy investments.”
Silicon Valley-based Khosla Ventures remains the largest shareholder in LanzaTech. Other New Zealand investors include Sir Stephen Tindall’s K1W1 fund.
Welcoming the NZ Super Fund investment, Sir Stephen Tindall, one of LanzaTech’s first investors, said: “LanzaTech has been highly successful and the NZ Super Fund’s investment is a key step in continuing the company’s progress and global expansion. We have been involved with LanzaTech from the outset and take great pride in its success – LanzaTech has an important social contribution to make in reducing air pollution and at the same time turning waste gas into valuable products.”
LanzaTech’s first commercial plant is targeted for operation in 2016.
The investment will be managed by the Fund’s in-house team.
About the New Zealand Superannuation Fund
The New Zealand Superannuation Fund is a NZ$27 billion sovereign wealth fund established by the New Zealand Government to partially pre-fund the future cost of universal pension payments. A long-term, growth-oriented investor, the Fund has returned 9.9% p.a. since inception in 2003. The Fund is managed by the Guardians of New Zealand Superannuation, a Crown entity.
LanzaTech is the global leader in gas fermentation technology and provides novel and economic routes to fuels and high-value chemicals from waste carbon streams. By leveraging waste resources, LanzaTech’s solutions mitigate carbon emissions from industry without adversely impacting food or land security. LanzaTech’s unique process currently protected by 100 granted patents, produces sustainable fuels and platform chemicals that serve as building blocks for everyday products such as rubber and plastics. In 2014, LanzaTech was recognized at the top North American Company in the Cleantech 100 and ranked #1 Hottest Company in Bioenergy by Biofuels’ Digest. Founded in New Zealand, LanzaTech has raised more than $160 million from investors including Khosla Ventures, K1W1, Qiming Venture Partners, Malaysian Life Sciences Capital Fund, Petronas, Mitsui, Siemens and China International Capital Corp.
NZ Super Fund
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