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The New Zealand Superannuation Fund sold 7.6 percent of Auckland International Airport for a 6 percent discount, raising $276 million and benefiting from a share price near a five-year high.
The selldown was initiated by Morrison & Co Funds Management, which managed the investment for the fund. The sale was managed and underwritten by UBS New Zealand.
The shares were sold overnight to institutions at $2.76 apiece, below yesterday's close of $2.94, which was the highest since November 2007.
In morning trade, the shares (NZX: AIA) had dropped 5.6% to $2.775.
"We are always looking to get the best return we can on our investment portfolio and to ensure we have the right mix of investments in our fund," general manager of investments Matt Whineray says in a statement.
"In conjunction with our investment manager Morrison & Co we have taken the opportunity presented by the current strong New Zealand share market and good demand for the shares to reduce our large overweight position in AIA."
The transaction comes a week ahead of the airport company reporting its first-half results next week, which are expected to show a 3.1 percent increase in revenue to $222.5 million and reported profit before items up 4.2 percent to $73.7 million, according to Forsyth Barr analyst Andy Bowley.
The fund has some $3 billion of its holdings invested in New Zealand, including recent purchases of 35 percent of Datacom and an increase in its stake in Kaingaroa Forest.
Shares of Auckland Airport are rated a 'hold' based on the consensus of 10 analysts polled by Reuters, with a median price target of $2.81.
The fund retains a 2 percent holding of Auckland Airport, it said.