New Zealanders now have almost $150 billion invested through KiwiSaver. Could more of that capital be helping fund New Zealand’s infrastructure – and what would investors get in return? Milford Investment Director Max Harrison joins Ryan Bridge to discuss how infrastructure investing works, why Australia is further ahead, Milford’s recent $100 million commitment to public-private partnership infrastructure fund Zealandia, and whether directing retirement savings into local infrastructure should be legally mandated.
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Bridge talks Business: 6 October 2026
Episode Transcript
Ryan Bridge
Kia ora and welcome to episode 96 of Bridge talks Business with Milford. It’s no secret that New Zealand has an infrastructure deficit. We need more roads, we need better roads, we need better public transport, better connectivity. The multi-billion dollar question of course is how do we pay for it? The Aussies have a massive pension fund that invests in their own infrastructure. Here, KiwiSaver is approaching $150 billion in assets, so why aren’t more of them some of our own roads? We look at that today. First, your top five business bits.
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- US non-farm payrolls surprised on the downside last week. It’s the key employment report for the world’s biggest economy. Job creation was significantly weaker than expected, while the unemployment rate was up. That’s despite consensus forecast for no change. Wasn’t a great report and bucked the trend of recent data showing the economy humming along.
- US PCE inflation. This is the Federal Reserve’s preferred measure of inflation, came in a touch below expectations last week. Changes to the way they calculate the numbers, partly to blame there, also lower prices from tariff U-turns.
- A dovish tone from central bankers last week, emphasising patience and figuring out the cumulative impact of policy tightening already delivered. Markets scaling back expectations for more rate hikes in the US.
- The RBA across the Tasman, increasing rates as expected, although the press conference was somewhat less hawkish than anticipated. Four rate hikes for Governor Bullock. And she’s hoping that’ll do the job on inflation. Data last week showing below expectations, spending slowing and government bonds rallying off the back.
- Number five, the week ahead, relatively quiet. Key releases include the ISM Services Index, which will give us another read on the strength of US economic activity. And of course, the Federal Reserve Minutes, spilling the tea – any juicy bits from last month’s rate hike.
Alright, it is time for our feature interview. This week, we’re gonna sit down with Max Harrison, Investment Director in Milford’s Private MNarkets team, to talk about investing, infrastructure, and using KiwiSaver to unlock the future potential of New Zealand. Just a reminder, this segment is informational only and should not be considered financial advice. Max, welcome to the podcast.
Max Harrison
Thank you.
Ryan Bridge
Great to have you here. So we’re going to talk about private equity, we’re going to talk about infrastructure and we’re going to talk about KiwiSaver. Comparing us to the Aussies, we’ve got about $150 billion currently or about to hit $150 billion under management for KiwiSaver. How much of that is invested in New Zealand infrastructure?
Max Harrison
Very little. I don’t have an exact figure but to give you an idea, only two to three percent of KiwiSaver money is invested in private assets – total. So that’s private equity, infrastructure, VC both locally and overseas. Whereas in Australia, their Aussie Super’s really got a head start on us. They’ve been around since the ‘90s. They’re about $5 trillion under management versus $150 billion, and about eight percent of that is in infrastructure.
Ryan Bridge
Just infrastructure?
Max Harrison
Just infrastructure.
Ryan Bridge
So our two to three percent is across all private assets. Their eight percent is just on infrastructure. So roads and rail and whatever else it might be.
Max Harrison
Exactly. Yip.
Ryan Bridge
Why?
Max Harrison
Why? I think, well one, they got a head start on us. Two is scale. So private assets, they’re not like your listed stocks and bonds. It’s really hard to get in and out of them. You can’t buy and sell them on a drop of a hat. So you really need to reach a certain scale before it makes sense to have them in the portfolio. And we’re starting to reach that scale. And that’s why you’re starting to see KiwiSaver providers like ourselves really look at private assets more closely for the client portfolios.
Ryan Bridge
I can see why this makes sense from an NZ Inc point of view, from a country point of view. If we can build our savings and then invest in our own stuff in our own backyard. It’s great. And the Aussies are a great example of that. You know, drive around on a motorway there. However, as an individual investor, is it smart for me to have – you know, if I’ve got my funds with Milford as I do, is it smart for me to have loads of investment in something that is so illiquid?
Max Harrison
Not loads. It’s not great to put your entire portfolio in a highly illiquid asset like that, but certainly a portion of your portfolio, it makes sense to go into private assets, whether it’s infrastructure or private equity. More and more opportunities, exciting opportunities, aren’t coming to listed markets for a longer period of time. And so clients miss out on these great investment opportunities unless they have access to the private asset world. And on the infrastructure side, infrastructure really provides a great balance to a diversified portfolio. Infrastructure historically provides inflation correlation, low risk, steady income, and the value of infrastructure investments don’t tend to move up and down and wild swings like you see in the other share markets. So it provides a good balance to a portfolio.
Ryan Bridge
Max, we’ve just been talking about your experience overseas. You’ve lived in London, you’ve worked in New York more recently, and you’ve been working in the infrastructure investment space. Does New Zealand have some exciting infrastructure investments, you know, to an international audience?
Max Harrison
Yes, it certainly does. So generally in New Zealand, we do attract overseas infrastructure investors, whether it be the Canadian pension funds or Aussie investors, we do attract capital down into New Zealand assets. And we also have our homegrown New Zealand fund, Morrison, that also invests in New Zealand infrastructure.
Ryan Bridge
Tell us about the Zealandia deal. What’s it about?
Max Harrison
So Zealandia is a really exciting opportunity. It’s a New Zealand owned fund that uses New Zealand capital to invest in New Zealand infrastructure. That being public-private partnership infrastructure. So we have been a cornerstone investor in that, alongside ACC. We put a $100 million commitment towards it, and about $30 million of that has been invested on day one into three assets that are already up and running. So Puhoi to Warkworth motorway, Transmission Gully, and Auckland South Correction Facility.
Ryan Bridge
So the motorway in Northland you’re talking about, or heading towards Northland, is already constructed. How do you make generate revenue from that?
Max Harrison
Yeah, it’s a great question. So you can think of it like a rental property, but your tenant is the government, and it’s a long-term tenant. So they pay you to keep it open, operating and safe, and those payments are linked to inflation. So it’s a pretty safe income-generating asset.
Ryan Bridge
So Max, a lot of people talk about, you know, the importance of KiwiSaver funds investing in New Zealand projects – New Zealand infrastructure projects. Do you think that they should be legally forced to do something like that?
Max Harrison
No, I don’t think so. I mean, KiwiSaver money is people’s retirement savings, and our job is really to help that grow and provide for people in their retirement. So being forced into an investment that might not be advantageous for the client is, in my view, not a good outcome. You know, where the government could be helpful is providing a clear pipeline of opportunities that are well structured that will allow people like Milford or Zealandia to invest into New Zealand projects, rather than trying to mandate it. If they’re well-structured and they make sense and they have good risk adjusted returns, the market will answer, like Zealandia, and invest.
Ryan Bridge
Milford’s been significantly expanding its capability in this space, in the private market space for a while now. Is there a real opportunity there? Will there be more of that?
Max Harrison
If you look at our team, we have been investing in the private market or private equity space for 15 years and we’re really starting to build out the team more and build on that experience, because KiwiSaver and the funds have reached a scale where it makes sense to deploy more money into this space, as I had already highlighted with the Aussies being ahead of us in this respect. We’re building out the team, we’re trying to get more client access to exciting opportunities they wouldn’t be able to get elsewhere because of the illiquidity of the investments.
Ryan Bridge
Are all private assets created equal? You have your PPPs, which I think we’re all quite familiar with, and nowadays you have data centres and you have all sorts of new kinds of opportunities in the infrastructure space. Are they all created equal?
Max Harrison
No, they’re certainly not created equal. If I start with the private asset, private market generally, you have VC at completely one end of the scale – high risk, high return potentially, and then down at the other end you’ve got private credit or PPP assets which are lower risk, lower returning. In the infrastructure world, there’s also a split. So you’ve got the PPP assets which, as I said, it’s like a government property that you’re earning with a government tenant over the long term, but then you could also be building a new data centre or building a fibre network or owning a logistics company which has more market risk, construction risk, development risk and obviously demands a higher level of return.
Ryan Bridge
Fascinating. So Milford is obviously on a journey when it comes to private markets. New Zealand’s on a journey when it comes to private markets and our scale is allowing us to do that. If we were to sit down in 10 years’ time, we’d obviously both look a lot older. Apart from that, what would success in this area look like for you do you think?
Max Harrison
I think success for us really is making sure that clients have access to these exciting opportunities that they wouldn’t have elsewhere, whether that’s in infrastructure, private equity, VC, having that as a meaningful portion of their portfolio, driving meaningful outcomes, that’s success and in order to do that we need to deploy a decent amount of money and reach a certain scale.
Ryan Bridge
Charge it up. Max, lovely to have you on the podcast. Thank you very much.
Max Harrison
Really appreciate it. Thanks.
Ryan Bridge
That was Max Harrison, Investment Director in Milford’s Private Markets team, talking to us about KiwiSaver, about infrastructure, and how we can unlock some of those future investments for KiwiSavers. You can like, follow, and subscribe this podcast wherever you like to listen. We love you doing so. Until next week, don’t forget to invest in yourselves.
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