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Investment Approach

We have developed an investment approach that we believe will help us to achieve our vision. We aim to preserve capital and maximise the funding available for granting, with the flexibility to respond to investment opportunities as they arise.

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The Foundation relies on investment returns to fund the grants and support budgets each year, making investment strategy critically important.

Our key driver as a Trust in perpetuity is to protect our endowment, or pūtea, and yet still 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 will endure for ever barring some unforeseen event. 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, investments which are relatively illiquid, but which have historically provided good returns and make sense for a Trust like the Foundation. Other, more liquid investments are used to provide cash 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, the Foundation’s lawyers and management. Where appropriate other subject matter experts are utilised as needed.

The Investment Committee is comprised solely of Trustees and one non-voting independent adviser. The Committee meets six times each year but can also meet 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 eg appointment of new investment managers.

The Investment Committee has adopted a process where the investment objectives, strategy and policies are reviewed on a regular basis. The investment strategy has been the subject of thorough review in 2021. Compliance with the strategy is continually monitored by the asset consultant and Foundation staff.

Our SIPO (Statement of Investment Policies and Objectives) outlines our strategy and details our specific objectives.

A key part of our and any Investment Strategy is the strategic asset allocation – the setting of target allocations 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 assets which provide short term and long-term growth, liquidity for cash needs, and protection against both a return of inflation and deflation. All these allocations have a level of risk which is understood and accepted by Trustees.

Asset allocation

The Foundation’s asset allocation policy is categorised under four broad asset groups, or asset buckets, according to the primary roles that each asset class plays in the portfolio:

  • Growth Assets: the Foundation’s growth engine, consisting of both listed and private equity
  • Diversification Assets: which reduce the volatility inherent in an equity-biased portfolio
  • Deflation-Hedging Assets: providing insurance against a prolonged economic contraction
  • Inflation-Hedging Assets: providing insurance from an unexpected spike in inflation.