all subsequent settlements, whichhas
so far amounted to almost NZ$300 mil-
lion. Ngai Tahu’s fund boasts anaverage
annual return of more than 15%sinceit
began, says Mike Sang, chiefexecutive
officer of Ngai Tahu HoldingsCorp.,the
iwi’s investment arm.
The profits benefit Ngai Tahu’s61,000
members through cultural, environmen-
tal, and economic development.By
June 30, the end of this financialyear,
NZ$573 million will have beendirected
to iwi initiatives, including scholarships,
grants, and a matched savingsplan
through which members saveforeduca-
tion, homeownership, and retirement.
As the distribution policywasbeing
developed, Ngai Tahu looked aroundthe
world and took guidance fromendow-
ment funds such as those runbyYale
and Harvard in the U.S., says Sang,who
prior to working for Ngai Tahuwaschief
financial officer at farm supplycompany
PGG Wrightson. The iwi adoptedparts
of the Ivies’ model, making investments
it could hold on to for years ordecades
to create intergenerational wealth.“The
key reason we exist is for theiwitobe63A tribe’sastuteinvestmentshave
ledtoa 15%returnNEW ZEALAND’S INDIGENOUS
Maori people were guaranteed
equality when they signed the
Treaty of Waitangi with the
British Crown in 1840. But it
took more than 150 years for
the government to apologize
and seriously address the in-
justices the Maori suffered
during colonization, when vast
tracts of land were bought from
them for a pittance. That loss
of an economic foundation still
disadvantages them.
In 1998 the Ngai Tahu tribe of
Christchurch got a NZ$170 million pay-
out from the government, one of the
first in a series of compensation pay-
ments that have given tribal groups, or
iwi, the opportunity to invest. Today,
Ngai Tahu owns a portfolio of tourism
ventures, commercial and residential
properties, farms, forests, and fisher-
ies. Its assets are valued at NZ$2 bil-
lion ($1.3 billion), the largest of any
iwi, while the broader Maori economy
is estimated at NZ$50 billion. “As the
peace and reconciliation process con-
tinues, as the assets have gone back to
the tribes, as economic capability and
capital has become available, it’s fantas-
tic,” said Adrian Orr, New Zealand’s cen-
tral bank governor, in a recent interview
with Bloomberg News. “Ngai Tahu is a
great story.”
Even though the iwi got a fraction
of the amount it was estimated to have
lost, its investment plan has become a
blueprint for others to follow. Under a
clause that ensures the first iwi to settle
won’t be disadvantaged later on, Ngai
Tahu also receives 16% of the value of$1.3b
THE MAORI
MODEL
What Ngai Tahu’s
assets are worthThen-Prime
Minister Jim
Bolger and
Ngai Tahu
leader Charles
Crofts sign the
settlement pactable to achieve its aspirations in
terms of the well-being of people,
cultural revitalization, and envi-
ronmental restoration, so it’s
important that we’re able to pro-
vide a consistent distribution,”
Sang says. “The amount of cap-
ital per person has grown. We’ve
performed better than what we
would have hoped.”
The iwi made astute early
investments. In the late 1990s it
purchased a 25% stake in fledg-
ling retirement village operator
Ryman Healthcare Ltd. for NZ$7.5 mil-
lion. It’s since sold down its stake to
2%, generating, along with dividends,
returns of NZ$315 million; the remain-
ing holding is now worth NZ$118 million.
An investment in Shotover Jet Ltd.,
which is based near the South Island
resort of Queenstown and offers tour-
ists speedboat rides, began in 1999 with
an initial purchase of 38% of the com-
pany. Ngai Tahu completed a buyout
five years later. The iwi now owns other
tourism companies, which offer scenic
helicopter flights, whitewater rafting,
and trail hiking. It also has a stake in a
whale-watching business.
Ngai Tahu accepted the government’s
settlement offer 20 years ago because
“eventually you’ve got to look at how you
want to move forward rather than keep
fighting the battles of the past,” Sang says.
By contrast, the largest Maori iwi in terms
of membership, Ngapuhi, is struggling
to resolve a decade of internal divisions
that have stalled settlement negotiations
withthegovernment.Lastyearitsassets
werevaluedatjustNZ$59 million.
COURTESY NGAI TAHU —By Tracy Withers and Matthew Brockett
Bloomberg Businessweek
WHERE THE MONEY IS
May 27, 2019