The Auckland Future Fund has confirmed the sale of Auckland Council’s remaining shares in Auckland International Airport Limited (AIAL).
The sale, which was planned as part of the council’s Long-term Plan 2024-2034, saw the council’s 9.71 per cent holding of AIAL shares sold at a price of at least $8.08 per share. This exceeds the Long-term Plan 2024-2034 projection, which was for $7.89 after transaction costs.
The sale will return at least $1.31 billion for the Auckland Future Fund.
Today’s share sale for the Auckland Future Fund, which is a council-controlled organisation, is part of the council’s financial strategy to protect and strengthen Auckland’s physical and financial resilience. Auckland Future Fund Chair Chris Swasbrook says the sale will provide long-term benefits for the council, and the residents and ratepayers of Tāmaki Makaurau.
“The airport share sale enables the Auckland Future Fund to get underway with investing on behalf of Aucklanders and contributing funds to support council services,” says Mr Swasbrook.
“The transaction received multiple bids from global brokers and we are extremely pleased in the final outcome delivered by UBS. The Auckland Future Fund is now in a fantastic position for its next stage of investment.”
The funds realised from the sale of Auckland Council’s remaining AIAL shares will be invested by the Auckland Future Fund. The fund operates under the high-level direction of Auckland Council but through an independent structure, where the trustee’s board makes all key decisions.
Auckland Mayor Wayne Brown said today’s shares sale shows the council is listening to its ratepayers and delivering on its promises.
“Today’s sale is a positive for Auckland. We are getting on with delivering a future fund that will support Auckland in the long-term. The shares sale means the council is more resilient to shocks that impact Auckland and also helps reduce the rates burden for our communities.”
Liaison councillor Christine Fletcher said the sale of the airport shares is a positive milestone for the Auckland Future Fund.
“The sale of the shares is a launchpad for the Auckland Future Fund and enables it to get on and work for Aucklanders and our ratepayers. The board has moved quickly and decisively to secure a sale that is extremely positive. It’s pleasing to see the future fund progressing as planned on behalf of Aucklanders.”
Mr Swasbrook says that by diversifying Auckland Council’s major investments, the Auckland Future Fund that is now in place will help protect the Auckland region, but also provide long-term capital growth and cash distributions.
“This will help fund council services that benefit current and future Aucklanders, and reduce reliance on rates increases to fund Auckland services and infrastructure,” he says.
The Auckland Future Fund is estimated to provide the council with around an additional $40 million of cash returns per year from 2025/2026, while reducing its reliance on rates increases.
The Auckland Future Fund was independently advised on this sale by PwC and Simpson Grierson. The final price will be confirmed at settlement on Friday.
For more information on the Auckland Future Fund, visit aucklandfuturefund.co.nz
Frequently asked questions
What is the Auckland Future Fund?
The Auckland Future Fund is an investment for current and future Aucklanders and is designed to enhance the Auckland region’s physical and financial resilience.
By diversifying Auckland Council’s major investments, the Auckland Future Fund is part of a financial strategy to better protect and strengthen Auckland in times of need.
How does the fund work?
The fund sees the council moving from one key investment to many, adding diversity by investing across different entities, sectors and locations.
The fund has also been established to deliver revenue to help fund services and reduce reliance on rates. It is estimated it will provide an additional $40 million per year to council, from 2025/2026.
The Auckland Future Fund was introduced as part of Auckland Council’s Long-term Plan 2024-2034. It launched in September 2024. The intent is for the fund to create long-term benefits for the Auckland region and protect the value of intergenerational financial investments.
How is the fund set-up?
As a council-controlled organisation, the Auckland Future Fund operates under the high-level direction of Auckland Council but through an independent structure, where the trustee’s board makes all key decisions.
The board are guided by a clear set of investment objectives and policies set by Auckland Council. Established as a trust, there are strict protections over the fund’s assets. In particular, the protections require the fund to maintain the real value of its capital over the long term. Further protection is also being sought via the introduction of a local bill.
How will the investments work?
The fund will initially be capitalised with the council’s remaining Auckland International Airport shares. The council is assuming average annual returns of 7.24% per annum from the fund over the long term, after management costs. Of the projected return, 5.24% will be returned to the council as an annual cash distribution, with the remainder retained to protect the real value of the fund over time. The council may decide to transfer other investments into the fund at a later date.
How did the sale work?
The sale was conducted through the Auckland Future Fund Trustee and its independent advisors PwC and Simpson Grierson, inviting various global brokers to bid for the AIAL stake.
For further frequently asked questions, visit the Auckland Future Fund website aucklandfuturefund.co.nz.
