by David Chaplin
The New Zealand Superannuation Fund is spearheading efforts to create a united Māori investment vehicle capable of tapping into big-end-of-town private equity deals, with potentially NZ$6 billion (A$5.8 billion) up for unification.
As part of its broader ‘investment hub’ initiative announced last year, NZ Super will host a ‘hui’ – or community meeting – early in February to fast-track plans to launch a long-mooted Māori investment fund (MIF).
Will Goodwin, NZ Super head of NZ direct investments, said the hui – set down for February 10 at the fund’s Auckland HQ – was aimed at catalysing Māori business leader support for the MIF.
Goodwin said the MIF, – if it materialises, would prove a useful private equity co-investor for NZ Super (along with other large NZ government funds) as well as introducing Māori to previously out-of-scope deals.
“We’re looking for someone who can write NZ$100 million cheques alongside us,” he said. “That’s the sort of scale we’d like to see a MIF get to. That would also give Maori access to large investment opportunities which they don’t look at now.”
Goodwin said while any joint MIF private equity deals would initially be domestic-only, there was potential to include offshore assets in the longer term.
In a pre-hui communique, NZ Super says a “scale MIF” could:
- Set an intergenerational fund investment horizon better suited to Māori investment and kaitiakitanga [guardianship] objectives;
- Create quicker visibility by Māori over national and international deal flow;
- Develop greater deal/investment talent and intellectual property amongst Māori;
- Leverage the collective skills, knowledge, and capacity that iwi [tribes], Māori businesses, and the NZ Super Fund have;
- Establish a formal structured co-investment vehicle by which unique Māori opportunities can be developed and value maximised; and
- Minimise fees paid to external advisers and managers.
According to a report published by Wellington-based TDB Advisory last December, Māori collectively manage about NZ$6 billion in assets – largely acquired via the long-running Treaty of Waitangi settlement process.
However, as the TDB Advisory report details, there is a wide disparity in investment process and performance among the many iwi with property and fishing rights dominating the overall asset mix.
Historically, iwi have struggled to pool assets for collective causes – despite several efforts to push the agenda – but Goodwin said a more recent attempt, championed by Ngati Awa Group Holdings chair, Paul Quinn, to form a Māori bank morphed into the MIF idea.
Quinn is also involved in co-ordinating the NZS/MIF hui
“The idea has been bandied about for a long time,” Goodwin said. “But if we can bring iwi together we can all benefit.”
He said NZ Super was willing to share its investment processes, policies and governance experience to help develop the MIF.
For the MIF to succeed, Goodwin said it must genuinely represent the interests of a broad range of iwi, rather than the larger players only.
“We would like to see a robust governance structure with a majority independent board not just purely dominated by the bigger iwi,” he said.
Goodwin said, if agreed, the hui would establish a steering committee to flesh out the MIF’s practical details. “There’s no reason this should take any longer than a year to implement,” he said.
Goodwin joined NZ Super over a year ago following a long stint as CFO, Australia, for New Zealand family-owned investment firm, the Todd Corporation.
This week new recruit Tama Potaka, former Tainui Group Holdings head of corporate services, starts at NZ Super to co-ordinate investment hub activities, including the MIF.
“Tama will take up the dedicated front-end deal-sourcing role,” Goodwin said.
– Investment News NZ