The Foundation relies on investment returns to fund the grants and operational support budgets each year, making investment strategy critically important.
Our key driver as a Trust in perpetuity is to protect and grow our endowment, or pūtea, to derive sufficient income from our investments to continue granting for the current generations and investing for future generations.
Our investment strategy is formed around two key objectives:
- As a perpetual fund, to grow our endowment for the region’s future generations
- As the region’s largest philanthropic grant-maker, to generate sufficient income and hold sufficient reserves to allow us to support our communities with grants through the ups and downs of economic cycles and global investment performance.
The Foundation is a perpetual Trust, one which is designed to endure for ever so, it makes sense that the Foundation’s investments also have a long-term horizon. While the Foundation has some immediate cash requirements like granting, it can also exercise patience in its investing, holding investments which are relatively illiquid and which have historically provided good returns over the long term. Other, more liquid investments are used to provide shorter term returns and liquidity for grants and operations.
The overall investment strategy is agreed by all Trustees on advice from the Investment Committee, who are in turn advised by the Foundation’s asset consultant, an independent adviser, and the Foundation’s management. Where appropriate other subject matter experts are utilised as needed.
The Investment Committee is comprised of an Independent Chair, Trustees and one non-voting independent adviser. The Committee meets five times each year and more frequently if needed. The Committee recommends to the Board the high-level investment strategy and strategic asset allocation and has delegated authority from the Board to make decisions on execution of the strategy e.g. appointment of new investment managers.
The strategy was the subject of a bottom-up review upon the appointment of the new asset consultant in 2021; it is reviewed on an annual basis and compliance with the strategy is continually monitored by the asset consultant and Management.
Our Statement of Investment Policies and Objectives (SIPO) outlines our strategy and details our specific objectives.
A key part of our Investment Strategy is the strategic asset allocation – the setting of allocations to different asset classes within the overall portfolio (e.g. x% in global shares, y% in bonds and so on). This allows the Foundation to identify the best mix of asset types which provide short-term and long-term growth, liquidity for cash needs, and protection against inflationary and deflationary economic conditions. The allocations have varying levels of risk which are understood and accepted by Trustees.