This week saw a groundbreaking transaction by Auckland Council and Auckland Future Fund Trustee, capitalising the Auckland Future Fund and the resale of the final tranche of Auckland International Airport Limited shares.

The transaction marks what Simpson Grierson Corporate Partner, Michael Pollard describes as "the second biggest transaction of its type in New Zealand's history, and the culmination of the work done to establish an inter-generational investment trust for the benefit of Auckland."

The deal was led by Simpson Grierson Corporate Partners Michael Pollard, James Hawes and Anastasiya Gamble, and will return $1.31 billion for the Auckland Future Fund - a council-controlled organisation.

"Our team has worked with the teams at the Future Fund and the Council to establish the Future Fund and execute this complex and significant transaction," said Michael Pollard. "This deal represents a milestone in New Zealand's corporate landscape."

The Auckland Future Fund is part of the council’s financial strategy to provide long-term benefits for the council and the residents and ratepayers of Tāmaki Makaurau, as well as to protect and strengthen Auckland’s physical and financial resilience. 

Key transaction details

• Sale Value: $1.31 billion
• Share Price: $8.08 per share
• Shareholding Sold: 9.71% stake in Auckland International Airport Limited
• Executing Broker: UBS 
• Independent Financial Adviser to Auckland Future Fund: PwC
• Destination: Auckland Future Fund

Strategic significance

Christopher Swasbrook, Auckland Future Fund chairman, publicly highlighted the transaction's importance: "The airport share sale enables the Auckland Future Fund to get under way with investing on behalf of Aucklanders and contributing funds to support council services." The sale attracted multiple bids from global brokers, ultimately delivering an exceptional outcome.

Long-term benefits

Auckland Mayor Wayne Brown publicly emphasized the positive impact of the sale: "We are getting on with delivering a future fund that will support Auckland in the long term. The share sale means the council is more resilient to shocks that impact Auckland and also helps reduce the rates burden for our communities."

Key anticipated benefits include:

• Long-term capital growth
• Approximately $40 million in additional annual cash returns from 2025/2026
• Reduced reliance on rates increases
• Enhanced financial resilience for Auckland Council.

Governance and independence

The Auckland Future Fund operates under Auckland Council's high-level direction but maintains an independent structure, with the trustee's board making key decisions. Liaison councillor Christine Fletcher praised the board's swift and decisive action, noting the sale as a "launchpad for the Auckland Future Fund."

Award-winning expertise

Simpson Grierson recently celebrated at the NZ Law Awards, where the firm won the Equity Market Deal of the Year for strategic advice to Auckland Council on the initial $833 million sale of Auckland International Airport Limited, a transaction also led by Michael Pollard and James Hawes.