Other private market opportunities

Holdings reviewed several other appropriate direct opportunities over the year but did not conclude any investment. At year’s end several possibilities were under active analysis covering agri-business and commercial property. It is likely that one further direct investment in one of these areas may be made in the coming year.

Marae co-investment

We have been working on a project to allow affiliated marae the opportunity to invest in all or a part of the portfolio managed by Holdings and enjoy either an equity or debt style return depending on marae preferences. A substantial amount of work has been undertaken on the complex regulatory challenges of such a system and we believe we now have a workable model, as such, summary proposals have been distributed to marae. At time of writing, it is understood at least two marae are interested and we look forward to rolling out the programme formally in the next few months, with Holdings supporting Te Kāhui on this.

Non-investment activities

Holdings has also supported Te Kahui in building a case for external funding for a community housing project, potentially using some of the land available to Te Kahui under the Crown settlement. The concept has been designed and indications are that charitable funding is now in place.

Holdings has also been working on the design of a financial independence and savings package to be run with Te Kāhui for iwi members. Again there are reasonable regulatory hurdles and the programme is something we hope to be able to comment more on in the coming year, again in support of Te Kāhui.

Financial performance

The Taranaki Iwi Commercial Group (Holdings and TIFL) delivered a total pre-tax return of 5.3% on opening assets for FY18.

We are pleased with this return, which is consistent with the risk profile of the portfolio, which has significant cash and conservative managed funds components. As asset diversification is gradually implemented we would expect to see this rise over time.

Taranaki Iwi Commercial Group

Distributions

TIHLP and TIFL together made a $1.45m distribution payment to Te Kahui, in accordance with annual plan commitments.

The year ahead

For the coming FY19 year, Holdings looks forward to:

• Securing more of the settlement properties that are assessed as having commercial potential

• Seeing the returns from infrastructure bolster annual performance

• Working with the other investors to establish Te Puia Tapapa as a major local direct investor in good New Zealand assets

• Supporting Te Kahui on wider iwi projects such as the community housing and financial savings programmes

Conclusion

The board is pleased with financial performance in FY18 and with the progress made towards building a high-quality stable of direct investments. We look forward to continuing this momentum in FY19.

I would like to thank the TIHLP directors and our manager Koau Capital for their focus and engaging discussions during the year. Thank you also to the trustees and staff of Te Kahui o Taranaki for their continued support.

Naku te rourou nau te reurou ka ora ai te iwi.

Andrew Knight Chairperson

Taranaki Iwi Holdings LP

Taranaki Iwi Fisheries Ltd