The $500 million Anglican St John’s College charitable fund has named Makao Investments as its new asset consultant, replacing long-time incumbent, Trust Management.
However, Trust Management retains investment duties for the charity.
Grant Hope, St John’s College Trust Board chief, confirmed the charity had hired Makao for “investment advisory services” following a recent tender process.
Trust Management has a long history with the education-focused charity including several joint venture arrangements holding St John’s property assets.
Hope also spent almost 20 years at Trust Management, serving his final 12 years as chief executive ending in 2022.
A Trust Management spokesperson said the St John’s board in August “elected to separate investment management and advisory elements of their arrangements and in doing so appointed Makao for the provision of investment advice and reporting”.
“St John’s is a foundation client of Trust Management,” the spokesperson said. “… The management arrangements for the investment portfolio are unchanged and we look forward to working with Makao as they review the portfolio settings.”
As at the end of last year, St John’s reported almost $500 million of portfolio investments: about half is in commercial property while the remainder covers a diversified mix of listed shares, bonds and private equity.
The charity also lists two ‘mission aligned’ school properties on its books at a collective valuation of more than $62 million: St John’s College in Auckland and the Hukarere Girls’ College in Hawke’s Bay.
Trust Investments runs property assets in-house but uses Harbour for Australasian shares, Nikko for local fixed income, BlackRock for global bonds and State Street as international shares manager.
In the wake of a review last year, the St John’s board concluded the charity’s “funding methodologies and distributions needs to change “, according to the 2023 annual report.
As part of the strategic rethink St John’s will carry out “an examination of its investment portfolio and investment strategy with a view to freeing capital to enable significant missional investment”.
“That this examination should include a review of the significant residential estate of St John’s College with a view to redevelopment and intensification as a means of increasing potential income streams,” the report says.
During the two years to the end of 2023, the St John’s portfolio was hit with capital losses of some $45 million but maintained “an operating surplus of $17.6 million the 2023 financial year (2022: $19.4 million)” as income held steady over the period.
The charity was also hit by two natural disasters over 2022-23 following the massive volcanic eruption in Tonga and Cyclone Gabrielle in NZ that destroyed church properties.
According to the annual report, the “impact of Cyclone Gabrielle on Hukarere Girls’ College became a particular focus of the Trust, the kura and wharenoho in Eskdale being destroyed, while by the Grace of God all souls were evacuated safely”.
Makao was founded in 2019 by former Russell Investments consultants, Noah Schiltknecht and John Horrell. The business has since accrued a diverse client base of charities, wholesale investors and financial advisory firms (notably the Wealthpoint network).
Trust Management, a long-established player in the NZ charitable fund market, launched a series of portfolio investment entity (PIE) funds in 2020 with an ESG focus. The manager, which is owned by a charitable trust, also looks after more than $1 billion of property assets.