The performance of Meridian Energy shows the float price was too cheap and the blame for that rests firmly with the opposition parties at the time - Labour and the Greens - Craigs Investment Partners head of private wealth Mark Lister says.
In a report, Mr Lister said Meridian Energy shareholders were about to be asked to pay the outstanding 50c a share they still owed the Government.
When Meridian floated on the sharemarket in late 2013, investors made an initial payment of $1, with the remaining 50c due in 18 months.
''That year and a-half has flown by and on reflection, this instalment receipt structure has worked brilliantly for investors. They have been able to collect the full dividend payment while having to put only two-thirds of the capital which has supercharged the dividend yield investors have been receiving.''
Even after the additional 50c was accounted for, Meridian would still be offering about a 7% gross dividend yield.
The company would not necessarily go out of fashion with investors after that payment was made in May, Mr Lister said.
Labour deputy finance spokesman David Clark said it was a ''bit rich'' for someone like Mr Lister, who was closely involved in the sale process, to blame the opposition parties for a policy that was good in principle.
''The Government was reckless in putting up all of those same sorts assets in a fire sale. It must have been clear to the Government that would suppress the price. It became clear when the Government started a `set of knives and buy one and get one free' the price would be suppressed,'' Dr Clark said.
Mr Lister said since listing at $1, Meridian shares had more than doubled, providing investors with a return of more than 100% in less than 18 months.
Including dividends, the return jumped to 125% over the period.
Utility companies were supposed to be predictable firms that offered steady, modest returns.
They were not supposed to double in price within barely a year in the way a high-growth tech share might.
Partly, it could be explained by a fall in interest rates over the period, which made high-yielding shares more attractive and meant investor demand pushed up share prices, he said.
But with the benefit of hindsight, another key reason for such a strong performance was they were probably sold a ''little too cheaply'' in the first place.
''In my opinion, the blame for that rests firmly with the opposition political parties of the time, Labour and the Greens.
''The `NZ Power' reform policy they championed through 2013 and early last year was heavy on emotive rhetoric, and short on detail. Whenever the proponents were quizzed about how it would work or be implemented, there didn't appear to be many clear answers,'' Mr Lister said.
Labour and the Greens seemed to give up on the policy after the last electricity IPO was completed, and it did not get nearly as much airtime after that, he said.
That added weight to the view it was dreamed up only to derail the IPO process.
In that respect, it failed.
All it succeeded in doing was creating political and regulatory uncertainty among investors, and reducing the price the New Zealand taxpayer was paid for the 49% of the assets now owned by private investors and funds.
''In hindsight, it seems Labour and the Greens may have almost single-handedly contributed to a significant transfer of wealth from the average New Zealander, as the seller, to a much smaller group of people: those who could afford to buy shares in the IPOs.''
The Crown received $1.8 billion - including the 50c a share due shortly - for 49% of Meridian. Today, that stake was worth more than $3.2 billion. The 49% of Genesis sold down a few months later for $760 million was now worth almost $1.2 billion, he said.
''While those who bought these shares will be celebrating some excellent returns from investments that should have been relatively boring, maybe the rest of the country is due a belated apology from Labour and the Greens for doing them this disservice.''
At a glance
• Meridian Energy was floated on the sharemarket in late 2013. Investors made an initial payment of $1, with the remaining 50c due in 18 months.
• Since listing at $1, Meridian shares have more than doubled, providing investors with a return of more than 100%.
• The Crown received $1.8 billion, including the 50c a share due shortly, for 49% of Meridian. That stake is now worth more than $3.2 billion. The 40% of Genesis sold down a few months later for $760 million is now worth $1.2 billion.
• Labour and the Greens blamed for creating an investment climate of uncertainty.
