Appointment Of Four Investment Managers

For Immediate Release

13 July 2004

NZ SUPERANNUATION FUND ANNOUNCES APPOINTMENT OF FOUR INVESTMENT MANAGERS

The Board of the Guardians of New Zealand Superannuation today announced the appointment of four new investment managers. This brings to 15 the number of investment managers retained by the Guardians since management of the Fund's assets commenced on 30 September 2003.

Chief Executive, Paul Costello, said that this round of appointments has assisted the Guardians to meet the commitment of being fully invested by 30 June 2004. "We have delivered on our strategy of gradually moving from a position of holding $2.4 billion in cash on 30 September 2003 to investing almost $4 billion across a range of markets by 30 June 2004," he said.

Alliance Capital Management LP, based in New York, has been appointed to manage a global equity growth portfolio. The initial allocation to Alliance is NZ$251 million. Alliance uses a team of analysts located around the world to research stocks with a focus on larger companies. The portfolio targets between 100-150 stocks.

Alliance replaces RCM Capital Management. As a result of organisational changes within that firm announced earlier in the year, the Board has decided to withdraw funds from RCM until the effect of those changes can be observed.

Goldman Sachs Asset Management, also based in New York, has been appointed to manage a US small-cap value mandate. Its initial allocation is NZ$39 million and its appointment complements that of Thompson Siegel & Walmsley, which was funded in May 2004 and which also manages a US small-cap value mandate.

Grantham Mayo & Van Otterloo (GMO), based in Boston, has been appointed to manage a portfolio of non-US small cap securities for the Guardians. Its initial allocation is NZ$118 million and its appointment complements that of AXA Rosenberg, appointed in May 2004 with a mandate to invest in the same sector of the market.

WestAM Asset Management, based in London, has been appointed to manage an emerging markets mandate. Approximately 3% of the Fund's assets are targeted to emerging markets and the initial allocation to WestAM is NZ$79 million.

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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 Alliance Capital Management LP, Goldman Sachs Asset Management and Grantham Mayo & Van Otterloo, please visit

http://www.alliancecapital.com/

http://www.gs.com/client_services/asset_management/index.html

http://www.gmo.com/

http://www.westam.com/

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