IwiInvestor has moved to a fully-outsourced passive funds management model as it seeks to carve out a $1 billion plus niche as a low-cost investment provider to Māori-owned entities.
Debra Birch, who took over as IwiInvestor executive chair in February 2017, said the group – a wholly-owned subsidiary of the Tūwharetoa-associated Lake Taupō Forest Trust (LTFT) – previously operated a mixed model, managing some money in-house while also using third-party active funds.
IwiInvestor is the trading name of Taupō Moana Investments.
“Now we’ve outsourced all funds management under a best-of-breed approach,” Birch said.
IwiInvestor, which currently manages about $150 million on behalf of 40 or so mainly Tūwharetoa-linked groups, also appointed the Auckland-based MyFiduciary to provide research, investment advice and portfolio monitoring services.
The firm operates seven risk-weighted portfolios with an underlying product list that includes the AMP Capital NZ Shares Index Fund, the Dimensional Global Sustainability Fund (hedged) and the Nikko Asset Management NZ Corporate Bond Fund. IwiInvestor also has a discretionary investment management services (DIMS) licence application pending.
Birch said IwiInvestor planned to tap into the burgeoning Māori economy by offering low-cost funds management products as an “alternative to putting money in the bank”.
She said there were many Māori entities such as land trusts and small-to-medium enterprises that didn’t have the scale to invest in funds cost-effectively.
“There’s a challenge in this environment – with increasing compliance costs – to keep fees low,” Birch said. “We have the opportunity to assist Māori land trusts and SMEs without the capability to invest.”
As well as offering funds management services, IwiInvestor also acts as a conduit and adviser to a number of direct investments. For example, the group was instrumental in corralling 10 Tūwharetoa entities to invest as one in the recently-launched Te Pūia Tāpapa Direct Investment Fund (the $100 million plus pan- Māori effort brokered by the NZ Superannuation Fund in 2017).
IwiInvestor has set an “aspirational” target of hitting $1 billion in funds under management within five years, she said.
“To execute the plan a number of things would have to fall into place,” Birch said.
For the time-being she said IwiInvestor would also focus on the wholesale market following an ill-fated tilt at the KiwiSaver market ended in 2016.
The IwiInvestor KiwiSaver – the only Māori-owned scheme – folded mid-2016 after securing only 240 members over almost five years in operation.
“These things are a question of timing really,” Birch said. “It just wasn’t the right time for the KiwiSaver scheme.”
She said IwiInvestor could revisit retail in the future but for now the group aimed to broaden its appeal as a low-fee fund and investment advice provider to wholesale Māori clients across all iwi.
Last year a 20-year veteran of the Taupō Moana group, Linda Mastny, assumed the general manager role at IwiInvestor. In addition to Birch, the IwiInvestor board includes: LTFT chief, John Bishara; professional director, Steve Napier; and retired Wellington-based share investor, Nat Vallabh.
All the board members were appointed over 2016 and 2017.