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NZ Super taps Apollo to invest $200 million in life settlements

The NZ$34.6 billion ($24.4 billion) New Zealand Superannuation Fund committed $200 million to Apollo Global Management's Financial Credit Investment III, a life settlements strategy, a spokeswoman for the Auckland-based sovereign wealth fund confirmed Tuesday.

The commitment, which NZ Super awarded to Apollo on May 19, was the fund's third life settlements investment with the New York-based money manager.

According to New Zealand Super's most recent annual report, the fund's initial U.S. life settlement investment with Apollo in 2012 had a market value of NZ$65 million at the June 30, 2016, close of the latest fiscal year, while its second, awarded in 2014, was valued at NZ$271 million.

With the life settlements market, investors buy life insurance policies from policyholders for more than the cash surrender value of the policy but less than the net death benefit. A policyholder could be selling to meet an acute financial need or, as life spans become longer, to cover living expenses rather than continuing to pay premiums to provide for grown up, financially secure children.