The Rātā Foundation has followed fellow community trust, BayTrust, in reporting solid investment returns for the 12 months to the end of March.
Previously known as the Canterbury Community Trust, Rātā added almost $70 million to assets under management year-on-year after booking investment gains of just under $100 million – or an averaged annual return of about 16 per cent.
Earlier in August the $246 million Tauranga-based BayTrust recorded similar results, growing assets by $42 million on investment returns of $50 million.
Rātā – second-largest behind the $1.4 billion plus Foundation North in the community trust sector – salted away $68.7 million to its asset base over the year after making grants of $21.8 million and incurring upfront investment and administration costs of $7.2 million.
Advised by Mercer, the Christchurch-headquartered community trust reported total net assets of over $631 million at the end of March this year compared to almost $563 million 12 months previously.
According to the Rātā annual accounts, the trust invests through a current roster of 24 underlying managers with the portfolio managed in three different buckets classed as growth, diversifying and income assets.
In May last year Rātā settled on a new strategic asset allocation (SAA) model, bumping up growth exposure to 70 per cent from the previous 55 per cent in recognition of “the need to earn income to meet desired distribution levels and operational expenses with a desire to preserve and grow capital over time”, the latest statement of investment policies and objectives (SIPO) says.
“This represents a material change from the previous target allocation to growth assets of 55%. As part of the change, the Foundation will be extending its allocations to private market or unlisted investments (including private equity, unlisted infrastructure and private debt),” the SIPO says.
“The Trustees recognise that there will be a period of transition from the previous SAA (55% growth assets) to the new SAA (70% growth assets). The Trustees are aiming to achieve the new target growth allocation by 31 March 2022, with an interim target of 62.5% growth assets at 31 March 2021.”
This July Rātā chief, Leighton Evans, also hit back at a now-debunked Otago University study that claimed the fund had burnt $51.5 million in value over the three years to the end of March 2020.
Evans said in a release at the time that the fund had grown its asset base from $360 million at launch in 1988 to more than $620 million by 2021.
“Our funds are responsibly, ethically, and prudently governed and managed. When you look at our mix of investments they balance risk, return, and a need to make over $20m in annual grants to support our local communities in our funding regions,” he said in the release. “… The need for Rātā to invest its assets in such a way as to deliver the best possible risk-adjusted returns over the long-term is something our community has asked us to do.
“It is because we take a conservative approach we can ride out times of uncertainty like COVID, the Canterbury and Kaikoura earthquakes, and volatile market conditions to maintain our granting programme at the same level each year.”
Over the three years to the end of March 2021, Rātā returned an annualised 7.1 per cent.