Two International Equity Managers Appointed

MEDIA ADVISORY

10 March 2004

TWO INTERNATIONAL EQUITY MANAGERS APPOINTED

The Board of the Guardians of New Zealand Superannuation today announced the appointments of Bernstein Investment Research & Management (Bernstein) and LSV Asset Management (LSV) to manage international equities. The managers have been appointed because of their complementary approaches to selecting global stocks that are undervalued relative to their long-term earnings potential.

Bernstein, a New York-based equity manager with significant company research skills and resources, will manage a portfolio of international equities with an initial allocation of NZ$190 million, or approximately six per cent of the current value of the Fund. Bernstein is part of Alliance Capital Management L.P.

LSV, a Chicago-based quantitative value equity manager, will also receive an initial allocation of NZ$190 million. LSV is an employee-owned firm established by three finance academics from the universities of Chicago, Illinois and Harvard.

Commenting on the latest allocations, New Zealand Superannuation Fund Chief Executive Paul Costello said: "The appointments of Bernstein and LSV, two value-oriented international equity managers, complements the holdings of the other international equity managers, and ensures the Fund has a diversified portfolio of listed equities." The appointments of Bernstein and LSV bring the Fund's total number of investment managers to nine. Investment managers are appointed after a formal selection process that takes account of their approach in managing specific classes of assets and an assessment of the capacity of the individuals making up the investment team.

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Notes for Editors:

About New Zealand Superannuation Fund:

The New Zealand Superannuation Fund, which commenced investing at the end of September 2003, is designed to partially provide for the future cost of New Zealand superannuation. An ageing population means the cost of providing New Zealand superannuation is expected to double over the next 50 years. To prepare for this, the Government is allocating on average $2.2 billion a year to the Fund over the next 20 years while the cost of superannuation is relatively low. In the meantime, the Fund will invest the money on a prudent but commercial basis.

As the cost of superannuation escalates, the Government will progressively draw on the Fund to help smooth the impact on its finances. On current Treasury modeling, contributions will cease in 2025 and from 2026 the Government will start to draw the equivalent of between 15-20% of the annual cost of superannuation. When income tax payments are also taken into account, the net fiscal impact of the Fund is expected to exceed 30% of the cost of New Zealand superannuation for several decades.

The Fund, which is governed by a separate Crown entity, will continue to exist, and continue increasing in size due to compounding investment returns, indefinitely. The Fund is expected to grow to around $100 billion by 2020.

http://www.nzsuperfund.co.nz

For further information on Bernstein Investment Research & Management and LSV Asset Management, please visit www.bernstein.com and www.lsvasset.com

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