Tribes eye shared fund to lift their economic performance

About 50 iwi organisations from the eastern side of the North Island are considering a shared equity fund in a bid to turn themselves into economic superpowers.

While Tainui and Ngai Tahu - which own assets worth more than $1 billion between them - are the giants of the Maori economy, medium-tiered iwi groups need to find ways to amp up their growth rates, says the tribe that hosted a hui of the iwi at Tauranga.

Te Runanga o Ngati Awa chief executive Jeremy Gardiner said the meeting was for organisations "too small to be big and too big to be small". Ngati Awa, with assets worth between $300 million and $350 million, mainly in the primary sector, fitted the bill, he said.

Returning benefits to iwi members meant significant growth was needed. But while individual medium-sized iwi weren't able to make an impact on the market and quickly return benefits, a new way of working might solve that.

For example, a fund of $100 million which iwi could contribute to could be used to borrow against to invest in projects three or four times the size of the fund.

"We've had a few hui, now it's time to find out whether groups are interested, and if they are, timeframes around that."

But the conservative nature of many iwi organisations meant that taking on debt was often a risk many were unwilling to take because many of the assets came from Treaty settlements, Mr Gardiner said.

Taupo-based Tuaropaki Trust, whose half-billion-dollar assets include sizeable geothermal energy, is one of the few Maori groups which is using debt and not scared of it. It has a 70:30 asset-to-debt ratio.

Chairman Tumanako Wereta said that level didn't matter because the debt was backed by a solid revenue stream.

Following Maori Affairs Minister Pita Sharples' economic hui earlier in the year, the meeting was the latest gathering of iwi who are pushing the Government to come up with infrastructure projects that they can invest in.

Finance Minister Bill English, who also attended, said he didn't have a problem with doing business with iwi.

However, because these types of deals had never been done before, the Government would want to start small to "build confidence" with $100 million investments, in "social infrastructure" such as schools or police stations.