The first tranche of community trust 2024 annual reports show solid returns for the year along with an uptick in sustainable investment allocations.
For instance, the Otago Community Trust boosted its bottom line by about $34.3 million over the 12 months to March 31 following an $11.4 million loss last year while almost quadrupling exposure to environmental, social and governance (ESG) style strategies.
As at the end of the reporting period, the Otago trust reported over $313 million total assets under management, of which $202 million was held in ‘socially responsible funds’ compare to just $56.5 million in that category last year.
Early in 2023 the Otago fund hired Mercer as asset consultant to replace almost 30-year incumbent, Russell Investments, as well as farewelling long-time chief, Barbara Bridger.
Meanwhile, the Tauranga-based BayTrust also reported a comeback fund performance of 12.1 per cent ($30 million) for the financial year, more than recouping the $5.1 million investment loss over the 2023 period,
“This turnaround was driven by strong international equity market returns and is a testament to the quality of our investment decisions and the increased diversification and focus on sustainability that we have built into our portfolio over the past five years,” the BayTrust report says.
BayTrust, headed by Alistair Rhodes, has shifted the dial in recent years to a higher growth weight and a sustainable tilt (including a focus on impact investing) for its now $255 million portfolio.
“We continue to believe that, the traditional investment portfolio which has performed well for us over the past 30 odd years, will not perform as well over the next 30 years and moving to a more illiquid, low carbon and sustainable portfolio, will best position us best to maximise returns to our community over the long-term,” the BayTrust report says.
“As such, we are working closely with our Investment advisors [Cambridge Associates] to further refine and diversify our investment portfolio together with increasing our sustainable private investment allocations over the next two years as we move to a 85% growth allocation which aligns with the top performing perpetual overseas foundations model.”
The BayTrust accounts also reveal a few key underlying investment funds including the NT Emerging Markets Green Trans Index Fund, which represents more than 10 per cent of the total portfolio.
Other managers in the mix include Generation, Ownership Capital, Baillie Gifford, Lazard, Forester, ICG and Fisher Funds (for NZ fixed income).
Across the North Island, the JANA-adviser Trust Waikato also reported a strong year-on-year performance bounce, booking a $35.5 million gain to more than erase the almost $2.3 million red ink splotched in the 2023 accounts.
The $405 million Hamilton-headquartered community trust made just a couple of portfolio tweaks during the year, notably shifting from a vanilla Schroders global equities portfolio to the same manager’s Sustainable Core Fund.
Under the change, TrustWaikato also significantly raised the Schroders allocation from $10.6 million in 2023 to $46 million 12 months later – more than halving the exposure to an international shares fund managed by the Al Gore-founded Generation in the process.
The Generation allocation dropped to $42.7 million in 2024 compared to $87 million the previous year. Another global shares manager, Northcape Capital, also saw its TrustWaikato holdings increase from about $1.2 million in 2023 to $12.2 million 12 months later.
Trust Waikato reported approximately $56 million in ANZ fixed income and cash funds that would need shifting after the bank-owned manager announced an exit from the wholesale market earlier this year.
Several other community trusts, including the largest member of the 12-strong club, Foundation North, have yet to file accounts.