NZ council seeks investment manager partner

Napier City Council in New Zealand is seeking an investment manager to construct and manage property assets that can grow up to NZ$50 million.

Napier City Council, located on the eastern coast of the North Island, put forth a registration of interest (ROI) for fund managers who have demonstrable "experience and track record as an organisation in delivering services of a similar scale and scope to the quality standards required on time and within budget".

The council's total portfolio comprises leasehold property (NZ$103m), development land (NZ$50m), shareholding in Hawkes Bay Airport (NZ$14m), an investment fund (NZ$5m), and other assets.

The new mandate will commence with nominal seed capital of up to NZ$5 million that has the potential to grow to between $25 million and $50 million by 2033.

The appointee will work closely with Napier City Council's investment arm, Ahuriri Investment Management (AIM), which is slated to begin officially operating on July 1.

AIM replaces the Council Controlled Trading Organisation (CCTO), which manages the council's portfolio at arm's length.

"Council is exploring new ways of investing to diversify risk and improve liquidity and potential returns. As part of this process, AIM may diversify the Investment Portfolio in accord with the delegations from Council. AIM may choose to apply undistributed proceeds to grow an investment fund," Napier City Council said.

Income generated in the portfolio is used to supplement revenue from rates to support the council's operations. At the same time, Napier City Council said it is tasked with preserving and growing the value of the portfolio above inflation for current and future generations.

The council seeks investment managers that have local representation in New Zealand and are registered to provide financial services there.

The portfolio adopts a socially responsible investment framework. Investments exclude, but are not limited to, gambling, weapons, tobacco, and whale meat harvesting or processing.

"As a council, we are mindful that we must be socially responsible investors. We have agreed to avoid investing in activities that would be regarded as unethical by most people in New Zealand," says Napier City Council mayor Kirsten Wise said.

"This was feedback we received loud and clear during our Three-Year Plan consultation earlier [in 2024]."

Fund managers have until March 24 to express their interest.