Iwi assets climb from $6b to $7.8b: new report

The asset base of New Zealand's approximately 70 iwi rose by $1.8b in the last year to $7.8b, a new study out today has found.

Phil Barry and William Turner of financial and investment business TDB Advisory in Wellington released the Iwi Investment Report 2017.

The growth was driven partly by six new settlements in the last two years totalling $222m, they said listing iwi as Ngati Hei ($8.5m redress), Ngati Tamaoho ($10.3m), Ngāti Tūwharetoa ($78m), Ngāti Tara Tokanui ($6m), Ahuriri Hapū ($19.5m) and Te Wairoa ($100m).

Barry said $4.8b of assets was controlled by the eight richest iwi as at June last year and excludes relativity payments to Waikato-Tainui and Ngai Tahu.

The eight iwi represent about 53 per cent of the Maori population throughout New Zealand. They have around $4.8b in assets and that is steadily growing. Last year, eight iwi had just $4.4b, TDB noted.

Barry predicted that by 2026, iwi assets nationally could climb to $12b.

"Ngāi Tahu and Ngāti Whātua Ōrākei have comfortably outperformed our benchmark return of 9 per cent per annum, with average returns of 13 per cent per annum and 16 per cent respectively, over the last five years," the report said.

"Raukawa and Waikato-Tainui have generated returns approximately in line with the benchmark portfolio and the remaining four iwi have generated lower returns. They are Ngāpuhi, Ngāti Porou, Rangitane o Wairau and Tūhoe," the report said.

Ngāi Tahu, Ngāti Whātua Ōrākei, Rangitāne o Wairau and Waikato-Tainui had a strong bias towards property investment, reflecting their settlements. Ngāti Porou, Raukawa and Tūhoe had made a distinct effort to diversify their portfolios, particularly into managed funds, the report said. Ngāpuhi is yet to settle with the Crown, other than through the Treaty of Waitangi fisheries settlement.

The eight richest iwi

• The South Island's Ngāi Tahu is by far the wealthiest. Its 1997 Crown redress was $170m but it now has $1.66b of assets;

• Waikato-Tainui ($170m in 1995) has $1.22b;

• Auckland's Ngāti Whātua Ōrākei's ($18m in 2011) has $1.08b;

• Te Urewera's Tūhoe ($169m in 2012) has $348m;

• The East Cape's Ngāti Porou ($90m in 2010) has $232m;

• South Waikato's Raukawa ($50m in 2012) has $149m;

• Northland's Ngāpuhi (yet to settle) has $58m;

• The upper South Island's Rangitāne o Wairau ($25m in 2010) has $44m.

"Even though we are reviewing only eight iwi, these eight iwi account for approximately 53 per cent of the total Māori population in New Zealand (Census 2013) and manage approximately 60 per cent of total assets in the sector," the report said.

Barry said the stand-out financial performers were Tainui-Waikato whose assets had risen from $1.224 billion to $1.244b between 2016 and 2017 and Ngāti Whātua Ōrākei whose asset base rose from $938.8m to $1085.7b.

Waikato-Tainui had begun work on its Ruakura inland port and Ngāti Whātua is entering agreements with Housing NZ Corporation to buy tranches of Auckland land.

The report noted Ngai Tahu distributed $25m to members in 2017. Distributions had generally grown in line with net worth, TDB said.

However, the report did not note Ngāti Whātua Ōrākei Eastcliffe retirement village disaster where extensive seismic, weathertightness and safety issues prompted evacuations last year. Buildings will cost an estimated $29.7m to fix, making repairs to 33 units "unfeasible", according to Ngarimu Blair, a director of Ngāti Whātua Ōrākei's Whai Rawa.

The TDB report took an optimistic outlook on iwi finances: "There has been an increased level of investment diversification by a number of iwi when compared with our 2016 report. In 2017, Ngāti Porou, Raukawa, and Waikato-Tainui have taken steps to further diversify their portfolios through indirect investments in equities and some direct investments."