Hyoda.

Hyoda.

I'm Chelsea Daniels and this is the Front Page, a daily podcast presented by the New Zealand Herald. New figures have revealed the assets of our ten biggest EWI stands at eight point two billion dollars. A recent report from consultancy firm TDB Advisory shows the assets only rose by one hundred million dollars in the last three years as the economic turmoil over the last five years continues to have an impact on their investments, covering everything from property to farming, to managed funds and offshore opportunities. Many of these EWE owned assets have an impact on our day to day lives. So how do they compare to some of our biggest investment firms. To explain where ewei's have their money today on the Front Page, TDB Advisory director Phil Barriers with us to dive into this report. So I think a lot of people remain uncertain how all these ewis have made so much money. I suppose obviously there have been treaty settlements over the last few decades, but how has that led to them owning so much land and making so much money.

I'm Chelsea Daniels and this is the Front Page, a daily podcast presented by the New Zealand Herald. New figures have revealed the assets of our ten biggest EWI stands at eight point two billion dollars. A recent report from consultancy firm TDB Advisory shows the assets only rose by one hundred million dollars in the last three years as the economic turmoil over the last five years continues to have an impact on their investments, covering everything from property to farming, to managed funds and offshore opportunities. Many of these EWE owned assets have an impact on our day to day lives. So how do they compare to some of our biggest investment firms. To explain where ewei's have their money today on the Front Page, TDB Advisory director Phil Barriers with us to dive into this report. So I think a lot of people remain uncertain how all these ewis have made so much money. I suppose obviously there have been treaty settlements over the last few decades, but how has that led to them owning so much land and making so much money.

Well, the entities we look at are called the post settlement EWI entities, and so some of the big ones like Nati Fatu Iraqi, Nightitahu, why can I Taynoi? They settled with the crown, And in fact, in total there's been about one hundred EWI settled with the crown since the mid nineteen nineties. The settlements, if you had them all up, are added to about three point five billion dollars just in the dollars of the day when the settlements were made. And our best instrument is those assets now are worth around twelve billion dollar. So in a way, it's the magic of compound interests. If you like, you know, you just reinvest the profits. They've paid out some dividends, but have tended to take a long term view, and just over time those assets have grown as property values have increased, as share prices have increased, just as I say, the magic of compounding.

Well, the entities we look at are called the post settlement EWI entities, and so some of the big ones like Nati Fatu Iraqi, Nightitahu, why can I Taynoi? They settled with the crown, And in fact, in total there's been about one hundred EWI settled with the crown since the mid nineteen nineties. The settlements, if you had them all up, are added to about three point five billion dollars just in the dollars of the day when the settlements were made. And our best instrument is those assets now are worth around twelve billion dollar. So in a way, it's the magic of compound interests. If you like, you know, you just reinvest the profits. They've paid out some dividends, but have tended to take a long term view, and just over time those assets have grown as property values have increased, as share prices have increased, just as I say, the magic of compounding.

So what are these investment reports and why are they done?

So what are these investment reports and why are they done?

We will have been lucky enough to work with several of the larger ews over time and working with them on their investment strategies and financial strategies. And so we've been TDB Advisory, where independent strategic advisors, financial economic advisors. We just saw a demand out there for a bit of an independent review of the ewe's. Three things we look at. We look at their organizational structure, we look at their investment strategies, and we look at their financial performance. We've been doing this pro bono for I think close to ten years now.

We will have been lucky enough to work with several of the larger ews over time and working with them on their investment strategies and financial strategies. And so we've been TDB Advisory, where independent strategic advisors, financial economic advisors. We just saw a demand out there for a bit of an independent review of the ewe's. Three things we look at. We look at their organizational structure, we look at their investment strategies, and we look at their financial performance. We've been doing this pro bono for I think close to ten years now.

Which ewe's are a part of it.

Which ewe's are a part of it.

Typically the largest one, so we think we focus on the top ten if you like. Those ten probably account for about eight billion of assets of the twelve billion in total, so around two thirds.

Typically the largest one, so we think we focus on the top ten if you like. Those ten probably account for about eight billion of assets of the twelve billion in total, so around two thirds.

What are some of the assets owned by our biggest eweys. What are the industries where you can see the most investment.

What are some of the assets owned by our biggest eweys. What are the industries where you can see the most investment.

Well, not surprisingly a lot of it is the land, the fenoa, okay, and so it's the commercial property. Like we take an few examples y Katto Taiinui, a lot of investment in downtown Hamilton, the new ACC building for example, some of the hotels, the Ibis, the no Hotels, half share on the Auckland Pullman at the airport, other Nati Fatuiraki of course Auckland centric downtown Auckland, some very important ground leases there. Normally, we though have also diversified more and have quite a lot of their holdings now in what we call financial assets, so typically shares or bonds and managed funds so and some of those could be offshore or they are offshore. Yeah, if we look at for example, Touhoi in the two are Awra, you're a Weerra, they have just over half of their assets in these financial assets currently. Nati Pero also some of the sort of shares so different e wee, different strategies and yeah, just interesting to see how it's going over time.

Well, not surprisingly a lot of it is the land, the fenoa, okay, and so it's the commercial property. Like we take an few examples y Katto Taiinui, a lot of investment in downtown Hamilton, the new ACC building for example, some of the hotels, the Ibis, the no Hotels, half share on the Auckland Pullman at the airport, other Nati Fatuiraki of course Auckland centric downtown Auckland, some very important ground leases there. Normally, we though have also diversified more and have quite a lot of their holdings now in what we call financial assets, so typically shares or bonds and managed funds so and some of those could be offshore or they are offshore. Yeah, if we look at for example, Touhoi in the two are Awra, you're a Weerra, they have just over half of their assets in these financial assets currently. Nati Pero also some of the sort of shares so different e wee, different strategies and yeah, just interesting to see how it's going over time.

People on this house talking about mary Len. No, Mary Len. It was all mary Land confiscated, confiscated under the New Zealand Settlements Act in eighteen sixty three, and then they're talking about the settlements process where mary only get one percent of its total due Mary still only have the resources that they'regain because the government continues to make its money and it's profit of stolen Mali resources and assets. And then they wonder why body don't want to lose the four percent that it's still hes.

People on this house talking about mary Len. No, Mary Len. It was all mary Land confiscated, confiscated under the New Zealand Settlements Act in eighteen sixty three, and then they're talking about the settlements process where mary only get one percent of its total due Mary still only have the resources that they'regain because the government continues to make its money and it's profit of stolen Mali resources and assets. And then they wonder why body don't want to lose the four percent that it's still hes.

So what was the movement in twenty twenty four The headline figure is only a one hundred million dollar rise since twenty twenty two, but that still sounds pretty impressive to a club like me, How does that compare to previous performances.

So what was the movement in twenty twenty four The headline figure is only a one hundred million dollar rise since twenty twenty two, but that still sounds pretty impressive to a club like me, How does that compare to previous performances.

Yeah, Look, it's been a tough couple of years for EE and for investors generally in the New Zealand economy. So I think those twenty two and twenty three twenty four years probably three of the worse than the last ten years. On average, over the last ten years, the year we've achieved a five percent return twenty four in twenty twenty four it fell to about three percent. Actually, that's not bad compared to the returns that were available to most investors in the New Zealand economy. We calculated what we call a benchmark index, that's weights according to the sectors the EE investor, and that benchmark in twenty twenty four was a negative five percent return, primarily because property prices fell. That nz X Real Estate Institute fell by about seven percent, and the other big sector where the e WE invest in is primary sector and that index fell by around four percent. So you know, it's been tough. Fortunately, as I mentioned, many of the ere we are now more diversified. Typically they have around five or six asset classes, and that diversification can help shield you from those cyclical downturns. In any one sector. So for example, twenty twenty four was a great year for global securities. Not so good at the moment given all the term oil, of course, but in twenty twenty four the S and P five hundred New York rose by about twenty percent in US dollar terms, even more in New Zealand dollar terms because of the depreciation of the New Zealand dollar, and EWE who were in those investments like Knight Tahoo, like out A, Taiinui Tuhoi managed to achieve actually pretty good returns into for overall seven percent returns typically for those.

Yeah, Look, it's been a tough couple of years for EE and for investors generally in the New Zealand economy. So I think those twenty two and twenty three twenty four years probably three of the worse than the last ten years. On average, over the last ten years, the year we've achieved a five percent return twenty four in twenty twenty four it fell to about three percent. Actually, that's not bad compared to the returns that were available to most investors in the New Zealand economy. We calculated what we call a benchmark index, that's weights according to the sectors the EE investor, and that benchmark in twenty twenty four was a negative five percent return, primarily because property prices fell. That nz X Real Estate Institute fell by about seven percent, and the other big sector where the e WE invest in is primary sector and that index fell by around four percent. So you know, it's been tough. Fortunately, as I mentioned, many of the ere we are now more diversified. Typically they have around five or six asset classes, and that diversification can help shield you from those cyclical downturns. In any one sector. So for example, twenty twenty four was a great year for global securities. Not so good at the moment given all the term oil, of course, but in twenty twenty four the S and P five hundred New York rose by about twenty percent in US dollar terms, even more in New Zealand dollar terms because of the depreciation of the New Zealand dollar, and EWE who were in those investments like Knight Tahoo, like out A, Taiinui Tuhoi managed to achieve actually pretty good returns into for overall seven percent returns typically for those.

Three which EWE is the richest or has the most assets.

Three which EWE is the richest or has the most assets.

In terms of total assets, actually waking At Taui have sort of risen to the top and in the most last most recent couple of years, if you measured in terms of net assets per member, which if you know we're a key we saver investor, that's probably the measure you'd use. You look at the number of members of each EWI. You know, at one extreme you have Puui with about one hundred and twenty thousand members, hasn't settled yet with the crown, so it doesn't have a very much in the way of asset, it's still one hundred million, but not a lot per member. On the other hand, you've got nty five two Iraqi, which is a very small EWI and very wealthy, so their assets per member are around twenty thousand dollars At the moment.

In terms of total assets, actually waking At Taui have sort of risen to the top and in the most last most recent couple of years, if you measured in terms of net assets per member, which if you know we're a key we saver investor, that's probably the measure you'd use. You look at the number of members of each EWI. You know, at one extreme you have Puui with about one hundred and twenty thousand members, hasn't settled yet with the crown, so it doesn't have a very much in the way of asset, it's still one hundred million, but not a lot per member. On the other hand, you've got nty five two Iraqi, which is a very small EWI and very wealthy, so their assets per member are around twenty thousand dollars At the moment.

I think, what are some of the factors that are limiting the growth of their assets and the return that they're getting.

I think, what are some of the factors that are limiting the growth of their assets and the return that they're getting.

Well, like any investors, it's not easy to consistently year in a year out make positive returns. If you look at Naho for example, had done very well in over the decade, but last couple of years it's it struggled. It's net worth has gone down by about twelve percent. Total assets fallen by about eight percent. So debt is at the same time as assets have been falling, debt has risen somewhat, not not to overstate it, but there has been an increase. Why. They obviously hit by COVID, like most investors more recently, the property downturn, high interest rates ocr last year, you know, at around five percent the official cash rate. They're also quite heavily in the tourism market. Yeah, I don't know.

Well, like any investors, it's not easy to consistently year in a year out make positive returns. If you look at Naho for example, had done very well in over the decade, but last couple of years it's it struggled. It's net worth has gone down by about twelve percent. Total assets fallen by about eight percent. So debt is at the same time as assets have been falling, debt has risen somewhat, not not to overstate it, but there has been an increase. Why. They obviously hit by COVID, like most investors more recently, the property downturn, high interest rates ocr last year, you know, at around five percent the official cash rate. They're also quite heavily in the tourism market. Yeah, I don't know.

Much about the subject, but I think Nightaho I think tourism.

Much about the subject, but I think Nightaho I think tourism.

Yeah, it's not a big part of the portfolio actually, but it's a high profile shot over jet everybody knows that whale watch Kaikura tourism numbers, you know, have not rebounded in the way they have been many countries around the world. They've rebounded, but not back to pre COVID levels yet. So just you know, those operational things do matter. Keep in control of operational expenses. Administration expenses are important, and you know some of the EWI facing challenges there.

Yeah, it's not a big part of the portfolio actually, but it's a high profile shot over jet everybody knows that whale watch Kaikura tourism numbers, you know, have not rebounded in the way they have been many countries around the world. They've rebounded, but not back to pre COVID levels yet. So just you know, those operational things do matter. Keep in control of operational expenses. Administration expenses are important, and you know some of the EWI facing challenges there.

How do the EWIS fare as asset managers? How would you rate their performance compared to some of our banks or publicly listed companies.

How do the EWIS fare as asset managers? How would you rate their performance compared to some of our banks or publicly listed companies.

Well, as I say, if you look at the long term picture, and I think that's the shouldn't be influenced by short term sixicality. But over the last ten years, benchmark return has been about five point seven percent per annum, the EWI on average about five percent, so close almost almost fully match it. Now break it down a bit. Four of the EWI that we have the data for for the eight we have data, four have exceeded that benchmark, achieving bridge returns of around seven to eight percent. So that's the ro Kawas, the ninety five two Iraqis and the two big ones Tainui and Naitahu. Four of them have done worse than the benchmark over that long term, achieving returns of around three to four and a half percent. So still positive, but yeah, it should be you'd like to see some better returns.

Well, as I say, if you look at the long term picture, and I think that's the shouldn't be influenced by short term sixicality. But over the last ten years, benchmark return has been about five point seven percent per annum, the EWI on average about five percent, so close almost almost fully match it. Now break it down a bit. Four of the EWI that we have the data for for the eight we have data, four have exceeded that benchmark, achieving bridge returns of around seven to eight percent. So that's the ro Kawas, the ninety five two Iraqis and the two big ones Tainui and Naitahu. Four of them have done worse than the benchmark over that long term, achieving returns of around three to four and a half percent. So still positive, but yeah, it should be you'd like to see some better returns.

There are there any disparities between the ewi's in terms of how much they make. It seems like the ones with more of an urban property portfolio tend to fare better. Is that fair?

There are there any disparities between the ewi's in terms of how much they make. It seems like the ones with more of an urban property portfolio tend to fare better. Is that fair?

It depends, is the answer, And it depends in particular which years you're looking at. So ninety five two Iraqi, you know, ninety seven percent of its assets in aucan property, so sort of high risk strategy, but also has been high return as they rode the organ property bone last two years. Though a bit of a come back come back to earth, a bit of a reality check. The interesting ones also, as I said, the two Eastern North Island EWI two Hoy and Nadi Pero, who've chosen to invest more and manage funds about half of their assets. Again, there's been some psyclicality, but last year too Hoy did very well. It's even a seven percent return overall bounce back from its previous year, which was pretty poor. Nadi Perot's been to me a bit surprisingly week. It's financial returns only around three percent per annum over the ten years on average, and even last year when global share markets boomed, as I said that twenty percent increase, they haven't reported strong returns even in that year. It's a bit of a puzzle to me how to ewe's.

It depends, is the answer, And it depends in particular which years you're looking at. So ninety five two Iraqi, you know, ninety seven percent of its assets in aucan property, so sort of high risk strategy, but also has been high return as they rode the organ property bone last two years. Though a bit of a come back come back to earth, a bit of a reality check. The interesting ones also, as I said, the two Eastern North Island EWI two Hoy and Nadi Pero, who've chosen to invest more and manage funds about half of their assets. Again, there's been some psyclicality, but last year too Hoy did very well. It's even a seven percent return overall bounce back from its previous year, which was pretty poor. Nadi Perot's been to me a bit surprisingly week. It's financial returns only around three percent per annum over the ten years on average, and even last year when global share markets boomed, as I said that twenty percent increase, they haven't reported strong returns even in that year. It's a bit of a puzzle to me how to ewe's.

I mean, I suppose that it would be different for each EWI, but how do they generally decide what to invest in? Is it a vote amongst members or do they have a board?

I mean, I suppose that it would be different for each EWI, but how do they generally decide what to invest in? Is it a vote amongst members or do they have a board?

Yeah? Yeah, no, good, good question. It's they normally do have a and this is the structural question that we look at. Typically, the EUI set up two separate entities, often is multiple, but keep it simple. They have one enderity that focuses on the commercial management generating the money if you like. And then on the other side there are the ones that spend the money that have the social and educational goals. So those commercial ones the ones who decide where where the money is invested commercially. They typically have a board of some tribal appointed members and some independent members with hopefully with good strong investment expertise. Yeah, and that separation of roles actually, I think is very important. It ensures better accountability, better ability to measure performance. It's a little bit like what the government Central Government does with its stayed on enterprises, where you have the soees set up with the primary objective of making the money and then you have the msds and the education who spend the money.

Yeah? Yeah, no, good, good question. It's they normally do have a and this is the structural question that we look at. Typically, the EUI set up two separate entities, often is multiple, but keep it simple. They have one enderity that focuses on the commercial management generating the money if you like. And then on the other side there are the ones that spend the money that have the social and educational goals. So those commercial ones the ones who decide where where the money is invested commercially. They typically have a board of some tribal appointed members and some independent members with hopefully with good strong investment expertise. Yeah, and that separation of roles actually, I think is very important. It ensures better accountability, better ability to measure performance. It's a little bit like what the government Central Government does with its stayed on enterprises, where you have the soees set up with the primary objective of making the money and then you have the msds and the education who spend the money.

Last year, as part of the heralds Fanua project, we heard a lot about how the EWI assets today still pale in comparison to what the ewe's owned presettlement. We spoke on this podcast with Nati Fatua Araki Trust's deputy chair Narimo Blair.

Last year, as part of the heralds Fanua project, we heard a lot about how the EWI assets today still pale in comparison to what the ewe's owned presettlement. We spoke on this podcast with Nati Fatua Araki Trust's deputy chair Narimo Blair.

Today we called the Nati pat but that's really a reflection of we lost all of the control of all of that area, the fishing circuits and the hunting circuits for birds, and it was we were whittled away down to one called of an Acre, which was all we had left at ak which is our name today. But I don't really like that name because it really highlights that we were actually the masters of the holess miss and not just the Ford of an Acre land that we had left at Ki.

Today we called the Nati pat but that's really a reflection of we lost all of the control of all of that area, the fishing circuits and the hunting circuits for birds, and it was we were whittled away down to one called of an Acre, which was all we had left at ak which is our name today. But I don't really like that name because it really highlights that we were actually the masters of the holess miss and not just the Ford of an Acre land that we had left at Ki.

Do you think that it will ever be possible looking at your reports, for those assets to ever come close to what they once were.

Do you think that it will ever be possible looking at your reports, for those assets to ever come close to what they once were.

Look, that's not something we've locked at. We're looking at the strategy, structures, performance post settlement. Those settlements obviously politically negotiated process. We just take that as a as a given and sort of focus on what we're good at, which is the financial strategy side of things.

Look, that's not something we've locked at. We're looking at the strategy, structures, performance post settlement. Those settlements obviously politically negotiated process. We just take that as a as a given and sort of focus on what we're good at, which is the financial strategy side of things.

Phil, if you had to take a glimpse into your crystal ball, what do you think the future holds for EWE assets.

Phil, if you had to take a glimpse into your crystal ball, what do you think the future holds for EWE assets.

Well, I'm an optimist. I guess you sort of have to be. And you know there'll be volatility this year, huge uncertainties around the global political economy that will impact all investors and it will impact you know, some of the EE directly with if they're involved in our exports to the US, which are mainly beef and wine, some of the EE you're involved in that. But much more important is the whole global trading environment. And you know you've got to ride these hackups and hopefully come out the other side. I think the E we are have length, which is they do tend to take a longer term view, so you know, by nature they understand and will appreciate that cyclicality. They're also in strong position because they're gearing. Their debt levels are relatively low, about fifteen percent on average, So you know that means you have more financial flexibility too to ride the waves.

Well, I'm an optimist. I guess you sort of have to be. And you know there'll be volatility this year, huge uncertainties around the global political economy that will impact all investors and it will impact you know, some of the EE directly with if they're involved in our exports to the US, which are mainly beef and wine, some of the EE you're involved in that. But much more important is the whole global trading environment. And you know you've got to ride these hackups and hopefully come out the other side. I think the E we are have length, which is they do tend to take a longer term view, so you know, by nature they understand and will appreciate that cyclicality. They're also in strong position because they're gearing. Their debt levels are relatively low, about fifteen percent on average, So you know that means you have more financial flexibility too to ride the waves.

And when these ewe's get a positive return, what do they generally do with that money? I suppose every EWE is different as well, but they've got that that decides how to spend it. Do they put that back into the community.

And when these ewe's get a positive return, what do they generally do with that money? I suppose every EWE is different as well, but they've got that that decides how to spend it. Do they put that back into the community.

Look, that's a good question too, And you know there's always that trade off between long term aspirations which mean you sort of reinvest in it in the business, and the short term demands, you know, for meeting sort of social and educational needs. As you said, each ee wee is different. My view is that fortunately most of the ewe have taken a longer term view. And then now, you know, if you look at my Tahoo for example, you know they started out with the settlement of one hundred and eighty million. They multiplied that by ten to having you around one point eight billion in assets. Their dividends when they started out, you know, we're about ten million per annum. Last year they pay dividends of around sixty nine million. So you know that longer term, medium to longer term view in a way means you can have your cake and eat it. You know, you can have your assets and pay a higher dividend compared to if at the start they'd paid out everything in dibdends, they'd still be at one hundred eighty million assets. Perhaps.

Look, that's a good question too, And you know there's always that trade off between long term aspirations which mean you sort of reinvest in it in the business, and the short term demands, you know, for meeting sort of social and educational needs. As you said, each ee wee is different. My view is that fortunately most of the ewe have taken a longer term view. And then now, you know, if you look at my Tahoo for example, you know they started out with the settlement of one hundred and eighty million. They multiplied that by ten to having you around one point eight billion in assets. Their dividends when they started out, you know, we're about ten million per annum. Last year they pay dividends of around sixty nine million. So you know that longer term, medium to longer term view in a way means you can have your cake and eat it. You know, you can have your assets and pay a higher dividend compared to if at the start they'd paid out everything in dibdends, they'd still be at one hundred eighty million assets. Perhaps.

Thanks for joining us, Phil.

Thanks for joining us, Phil.

Thank you very much, Chelsea.

Thank you very much, Chelsea.

That's it for this episode of the Front Page. You can read more about today's stories and extensive news coverage at enzadherld dot co dot nz. The Front Page is produced by Ethan Sills and Richard Martin, who is also our sound engineer. I'm Chelsea Daniels. Subscribe to The Front Page on iHeart Radio or where you get your podcasts, and tune in tomorrow for another look behind the headlines.

That's it for this episode of the Front Page. You can read more about today's stories and extensive news coverage at enzadherld dot co dot nz. The Front Page is produced by Ethan Sills and Richard Martin, who is also our sound engineer. I'm Chelsea Daniels. Subscribe to The Front Page on iHeart Radio or where you get your podcasts, and tune in tomorrow for another look behind the headlines.