Rātā Foundation and Trust Waikato have kicked off the community trust reporting season with more-or-less flat investment returns, booking a minor win and a small loss, respectively.
The Christchurch-based Rātā was up almost 3 per cent for the year as the Mercer-advised portfolio added more than $13.8 million to trust coffers compared to 7.3 per cent (almost $44 million) in the previous reporting period.
Net assets for the Canterbury community trust dropped to just under $630 million from $648 million in the 2022 annual report as grants, administration expenses and investment management/advisory fees contributed to an $18.7 million deficit.
Meanwhile, Trust Waikato – advised by JANA – saw losses of $2.2 million (-0.37 per cent) for the year after recording a $20 million gain for the 12 months to the end of March 2022.
After accounting for investment returns, administrative costs and grants (of about $24 million) the Trust Waikato funds under management fell to $399 million from more than $430 million 12 month’s prior.
Both community trusts also held asset allocations steady year-on-year, although the Waikato fund pencilled-in a new impact portfolio, yet to be funded as at balance date.
Vicky McLennan, Trust Waikato chair, says in the group’s annual report: “To diversify our investment portfolio and align with our responsible investment objectives, this year we have added an impact investment asset class to our strategic asset allocation.
“Impact investing allows Trust Waikato to complement its grants programme with investments that deliver a financial return alongside a social return that creates transformational, long-term impact for our communities.”
The trust has set a target asset allocation of 2.5 per cent for the impact portfolio, equating to about $10 million based on the March 2023 fund balance.
Rātā also kept its broad asset allocation parameters in line with 2022 – putting about two-thirds in growth assets while dividing the remainder almost equally between income and ‘diversifying’ assets.
The ‘diversifying’ assets include a range of unlisted infrastructure, private equity, private debt (via the Australian manager, Metrics) as well as a small $100,000 allocation to the Awhi Impact Fund, operated by Soul Capital.
Overall, Rātā invests in 27 underlying managers recommended by Mercer – the same number as last year, however, it is understood the community trust swapped out a couple of global bond funds (including PIMCO and Wellington) for the Salt Sustainable Global Fixed Income Fund, which uses Morgan Stanley as underlying manager.
Murray Lapworth, Rātā chief investment officer, resigned from the community trust this May.
Rātā and Trust Waikato are two of the biggest community trusts outside the $1.8 billion Foundation North.