The New Zealand Growth Fund was up +0.5% in June, outperforming the S&P/NZX 50 gross index which was down -1.2%.

Infratil (+7%) raised $1.15 billion to fund opportunities in its portfolio, with the majority earmarked for CDC Data Centres (CDC). CDC has won the confidence of large government and ‘hyperscale’ customers, which has led to its built capacity doubling approximately every 2 years. CDC expects to sign contracts on over 400MW of capacity in the near term. Best-in-class water cooling systems and modular design make CDC well placed to support new Artificial Intelligence workloads, which is a key driver of its growth. A new Sydney site at Marsden Park will deliver around 720MW of capacity when fully built, making it one of the largest data centres globally. CDC has been part of Infratil’s portfolio since 2016 and has increased in value ten-fold over this period.

Meridian (-7%) surrendered some of its explosive gain on the last day of May (+10%), the day it announced a long term agreement to supply electricity to the Tiwai Point aluminium smelter. The company hosted its first investor day in three years, where it stepped through its long term strategy with the backdrop of this certainty. Meridian is planning on capturing its share (around 30%) of the new electricity generation New Zealand needs to build by 2050, which will broadly require $10 billion in investment over time. In the near term, this means committing to build most of its prospective wind, solar, and battery projects. Meridian also expects electricity prices to remain elevated for some time given increasing demand, gas shortages, and the time to bring new generation to market. Overall, it is well placed with its low-cost, flexible hydro generation, which will become more valuable as time progresses as more intermittent wind and solar generation is added to the system.