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Parish Accounting Newsletter
This newsletter includes information on the Covid-19 wage subsidy and GST on property sale.
The newsletter also features articles on the bank accounts and upcoming Parish seminars.
We also profile our Parish Accountant Lily Liang.
Property Fund COVID-19 Rental Impact Update
In May, the Manager of Trust Management Property Fund advised that there would be rental income collection impact due to COVID19 related issues. This is turn would impact the level of distributions. The Property Management Team has been liaising with tenants over the last 3 months to agree rental relief claims and to work through the individual tenant situation caused by the various Alert Levels. As a responsible landlord we have sought to approach the situation with empathy and understanding.
We have not experienced any tenant failures during the last three months.
May 2020 Newsletter
This edition of the newsletter includes information on our COVID-19 Level 2 operating procedures and a update on the market.
The newsletter includes articles on the property fund portfolio asset valuations as well as the COVID-19 rental impact.
The update reports on the performance of the funds compared to their benchmarks to 31 March 2020.
Property Fund COVID-19 Rental Impact
As investors will appreciate, the country lockdown under Covid-19 Alert Levels has been unprecedented. While it has impacted on everyone, the impact on commercial tenants in the Property Fund has varied. The largest tenant in the Trust Management Property Fund portfolio is Countdown supermarkets (General Distributors Ltd), which contributes 26% of the portfolio income on a direct and indirect basis. Supermarkets being an essential service were very busy during the lockdown period so Countdown continued to pay full rental.
The Fund has a good level of diversification by property sector exposure as well as tenant and location diversification. The Weighted Average Lease Term of over 9 years provides good insulation against Covid19 as new leasing will be difficult given that the economic impact of the lockdown may be felt for some time to come.
Property Fund Portfolio Asset Valuations
With the change to a Portfolio Investment Entity (PIE) Fund from 1 April 2020, the Trust Management Property Fund property portfolio was revalued on 31 March 2020. By 31 March New Zealand had moved to Covid-19 Alert Level 4 so the updated valuations reflected the Covid-19 situation at the time. The Fund value as at 31 March was $226m.
As expected, the valuation of the portfolio dropped by 2.89% on a “like for like” basis over the first quarter of 2020. The Registered Valuers looked to modify their previous valuations to reflect the impact of Covid-19. It is noted that the valuations contain a “Material Valuation Uncertainty” provision which highlighted the challenge of undertaking valuations at this time. All major valuation firms are adopting this provision within their assessments to acknowledge the reduced certainty due to the future impact that Covid-19 might have on real estate markets.
Since the end of March, most financial markets have performed well. Share markets have continued to bounce back following the February/March Covid-19 related selling, while defensive assets such as bonds have also performed well as interest rates around the world and in New Zealand have continued to fall.
The US share market (S&P 500 Index), for example, had its strongest monthly return since 1987, underscoring the importance of staying the course even in the midst of significant uncertainty and volatility.
COVID-19 Office Procedures
When the country collectively entered lockdown under Covid-19 Level 4, Trust Management immediately activated its business continuity plans which seamlessly transitioned to a remote working environment. We are pleased to report there was no interruption in service to clients who rely on our day-to-day financial management.
With the shift to Covid-19 Level 2, Trust Management is pleased to re-open its offices to staff on Monday 18th May, however we will operate under special conditions.
Appointment of Matthew Goldsack
General Manager Investments
Matthew Goldsack, has been appointed General Manager Investments of Trust Management. Matthew joins Trust Management from his previous role of 12 years with BT Funds Management (Westpac) where he was Head of Investment Solutions and responsible for the management of over $14 billion.
Matthew was responsible for the BT fund-of-funds solutions with significant input into manager selection. During his tenure, the BT internal investment team spun out to form the independently-owned Salt Funds Management.
Prior to joining Westpac/BT in late 2008, Matthew was the Head of Research for Axa Global Investors.
John Williams, Investment Manager Retirement
John Williams has decided that it is time that he spends more time with his family which now includes three grandchildren and as such, after joining Trust Management at the start of 2015, John will be retiring from Trust Management in late February 2020 in advance of his and Joy’s move to Christchurch.
Over the last five years John has been responsible not only for providing advice to our existing clients but also assisting with the establishment of a number of new client relationships. As many of you have remarked to me over the years, John’s ability to convert sometimes complex investment theories into simple terms (often using sporting analogies!) has put our clients at ease and allowed them to feel confident with the investment decisions they have made. The performance and stability of the returns earned from your investments stands as testament to the quality of the advice John has given.
So, while it is with sadness that we advise you of John’s retirement, we do wish John and Joy all the very best for their next adventure. Having known John for these past five years we can assure you he will not become a stranger to any of us at Trust Management!
November 2019 Newsletter
This edition of the newsletter includes information on our Christmas opening hours and reduced staffing levels during January 2020.
The newsletter includes articles on the seminar with Steven Dunlop which took place in October as well as the unconditional purchase of 186 Queen Street, Auckland.
The update reports on the performance of the funds compared to their benchmarks to 30 September 2019.
Lease Extended 9 - 13 Sims Road, Auckland
Earlier this year, Trust Management concluded a lease extension at Sims Road, Auckland on behalf of the Trust Investments Property Fund. This industrial property has a high profile as it adjoins the entrance to a busy motorway on-ramp in Penrose.
Trust Management negotiated a lease extension of 6 years from December 2019 as well as an increased rental. The value of the property has increased from December 2018 by 25.87% due largely to the lease extension. Patrick O'Reilly, General Manager Property said "The lease extension is a great outcome for investors in the Property Fund and gives confirmation from the tenant that the property is well suited for its future occupation."
Queen Street Retail Purchase for the Property Fund
Trust Investments Property Fund announced on 22 November 2019 the unconditional purchase of 186 Queen Street in Auckland.
Queen Street retail has strengthened in recent years with the addition of premium international brands. The development of Precinct Properties Commercial Bay, which opens in 2020, will not only increase office space but further anchors the retail offer in the central city. Inner city living has also contributed to the vibrancy of retailing in the CBD.
The ground floor Unit Title property is leased to Glassons Limited, (Glassons), which is part of the NZX listed Hallensteins Glassons Holdings Ltd group. A new lease has been entered into with Glassons from August 2019 for 8 years with fixed increases of 2.5% per annum. As part of the leasing Glassons will be refurbishing the store in the coming period.
The annual net rental is $788,000 with the Property Fund purchasing the property through an open market campaign for $15.75m. This purchase represents an initial yield of 5%. The purchase price is supported by independent valuation advice.
With the property purchase the Property Fund will have allocated close to 100% of its available cash funds held for investment. Settlement date for this property is scheduled for 31 January 2020.
Auckland Commercial Property Update
In October, Steven Dunlop from Savills New Zealand provided Trust Management clients with a review of the commercial property market in Auckland. Steven is the National Head of Valuation & Advisory Services for Savills so is well placed in providing an expert's outlook on the property market.
Steven provided an informative and interesting presentation on the current market dynamics. In this low interest rate environment demand for commercial property has continued to strengthen with investors looking for yield. Commercial property remains well positioned for the future with strong fundamentals being reflected in the main property sectors.
Deforestation Investor Statement
In line with our ethical investment policy and the principle of ‘first do no harm’, Trust Management has lent its voice to an engagement initiative which identifies risk in industries which rely on deforestation.
230 institutional investors representing USD $16.2 trillion in assets under management are calling on companies to take urgent action in light of the devastating fires in the Amazon, which have been fueled in part by the deforestation happening at an alarming rate in Brazil and Bolivia.
The engagement initiative calls for appropriate disclosure of deforestation risk exposure by companies and implementation of policy towards no deforestation.
Christmas Opening Hours
It has been a busy year, both for our staff and clients, but a very rewarding and enriching year at the same time.
The office will be closing on Monday, 23 December 2019 and reopening on Monday, 6 January 2020.
From 6 January 2020 to 10 January 2020 the office will be open but operating with reduced staffing levels, as we encourage our staff to have a well earned break with family and friends.
We look forward to meeting up with our clients and investors again in the New Year, and we wish you all the best for the festive season.
September 2019 Newsletter
This edition of the newsletter includes information on our upcoming October seminar with Steven Dunlop, National Head, Valuation & Advisory for Savills as well as an update on the social media engagement initiative which Trust Management joined in April 2019.
The newsletter includes articles on the Property Funds Solid Six Month Revaluation Growth as well as the Lease Extension at 1-15 The Avenue, Lynfield.
We also profile our new Director, Mel Hewitson.
The update reports on the performance of the funds compared to their benchmarks to 30 June 2019.
Lunch with Steven Dunlop
We are pleased to invite you to a lunch with Steven Dunlop, National Head, Valuation & Advisory for Savills at 12pm on Friday 4th October at our office, 123 Carlton Gore Road, Newmarket, Auckland.
As one of New Zealand’s leading commercial Registered Valuers, Steven is well positioned to provide his views on the New Zealand commercial property market.
Social Media Engagement Update
The social media engagement initiative which Trust Management joined in April 2019, has now grown to represent 60 local and global participants, with more than $5 trillion of assets under management.
The initiative was a result of the Christchurch Mosque shootings which took place on Friday, 15th March 2019. The NZ Super Fund led the establishment of the initiative which sought to engage with Facebook, Twitter and Google in respect of strengthening controls to prevent the distribution of objectionable content.
Solid Six Month Revaluation Growth
The Property Fund experienced a 2.55% revaluation increase over the first six months of 2019. The like-for-like analysis sees an increase in the capital value of the property portfolio by just over $4.8m from the previous six month revaluation movement.
In addition the Manager concluded the sale of the Harbourside Retail Centre in Porirua which transacted at a 3.88% premium to the December 2018 asset value.
1-15 The Avenue, Lynfield Lease Extension
Trust Management is pleased to announce the securing of a eight year lease extension from 30 August 2019 with General Distributors Ltd, (Countdown) at 1-15 The Avenue, Auckland.
This supermarket property is jointly owned by Trust Investments Property Fund and St John’s College Trust Board. The lease extension provides excellent long term tenant stability for both investors. Countdown is undertaking a major refurbishment of its supermarket premises to provide the latest look and improved layout for customers together with adding a new in-store pharmacy.
New Director - Mel Hewitson
We are pleased to announce Mel Hewitson was appointed Director of Trust Management as of 1 August 2019.
Mel is a professional director, following an executive career in institutional investment management, risk, compliance and financial regulation.
Mel is a director of Simplicity NZ Limited, Heritage Trustee Company Limited and Ngāti Whātua Ōrākei Whai Maia Limited. She is Deputy Chair of Foundation North, Chair of Centre for Social Impact and chairs the Nominating Committees for the Guardians of New Zealand Super Fund and the Waikato-Tainui Group Investment Committee.
Sharon Zollner Seminar
We were delighted to have Sharon Zollner, Chief Economist ANZ present to our clients in late August.
Sharon gave us a detailed assessment of New Zealand’s economic outlook, covering all the key indicators such as GDP growth, inflation, house prices, the labour market, household debt, the external position and terms of trade, and the government accounts. Bank capital and credit availability also featured in her presentation.
May 2019 Newsletter
This edition of the newsletter includes information on the Principles for Responsible Investment and features articles on our General Manager - Finance recent attendance at the 2019 Charities Conference as well as the acquisition of 104-140 Neilson Street, Onehunga and the sale of the Harbourside Centre.
Trust Management has also added its voice to the engagement initiative promoted by the NZ Super Fund, to strengthen controls on social media content.
We also profile our General Manager - Finance, Anne Edwards.
The update reports on the performance of the funds compared to their benchmarks to 31 March 2019.
Parish Accounting Newsletter
Quarter 2, 2019 Update
This newsletter includes information on our Parish Open Day on 26th June 2019.
The newsletter also features articles on the 2019 Charities Conference and Special Fund Reporting .
We also profile our Financial Services Manager, Grace Sun.
Strategic Land Purchase for the Property Fund
The Manager of the Trust Investments Property Fund confirmed on 10 May 2019, the unconditional purchase of 104-140 Neilson Street in Onehunga/Penrose for $16.4m.
The site is leased to NZ Bus, a company associated with Infratil and is utilised as a bus depot. It is a large piece of land being over 2 hectares in size located on a key arterial route. The lease has 7 years to run with the tenant having 2 x 6 year Rights of Renewal (requiring 12 months notice to exercise the renewal period).
Non-Core Asset Sold
The Manager is pleased to advise that an unconditional contract to sell the Harbourside Centre has been secured.
The Harbourside Centre is 50% owned with Rātā Foundation. Both parties identified the property as a non-core asset within our respective portfolios. The sale price being $7.5m (100%) with settlement due at the end of June. The sale price represents a premium to the asset valuation. In recent years the Manager has been repositioning the property for disposal – a key initiative was to Unit Title the retail premises which was completed in November.
Social Media Content Controls
Trust Management has added its voice to the engagement initiative promoted by the NZ Super Fund to strengthen controls on social media content.
The number of investors involved in the engagement exceeds 50, and represents total assets under management of more than $4 trillion NZD.
Trust Management’s CEO, Grant Hope, said ‘We see engagement on ESG matters as an important role for investment managers, ensuring that the views of our investors are heard by the companies which they invest in'.
Principles for Responsible Investment
Trust Management is a signatory to the UNPRI.
The Principles for Responsible Investment commonly known as the ‘UNPRI’, is an organisation promoting the implementation of responsible investment principles.
Signing the internationally-recognised Principles for Responsible Investment allows an organisation to publicly demonstrate its commitment to responsible investment.
Signatories also have access to a wealth of information and tools for collaboration.
You can view the signatories, by using the search tools at https://www.unpri.org/signatories/signatory-directory
If you have any questions about Trust Management’s approach to responsible investments, please do not hesitate to contact us.
2019 New Zealand Charities Conference
Over 2 days in April, Anne Edwards - General Manager Finance attended the 2019 New Zealand Charities Conference, “Future prospects for charity law, accounting, and regulation”. Attending the conference reflects our commitment to having a strong voice in shaping the regulatory environment that impacts our clients.
Building on the success of 2018, this multi-disciplinary conference covered legal, accounting and related practical issues associated with the charitable sector, and aimed to:
Inform and educate on important topics for charities
Strengthen links, contacts and collaboration within the sector community
Share lessons learnt and best practice that have worked for others, within New Zealand and beyond
Stimulate discussion and input into the review of the Charities Act 2005.
Profile: Anne Edwards - General Manager Finance
Anne Edwards, Trust Management’s General Manager of Finance, believes her thirst for knowledge, attention to detail and passion for the stories numbers tell are the traits that allow her to excel at her job.
Anne came to the company in 2015 with an impressive career background. With almost 30 years in the industry, she spent nearly half of her career as Associate Director at UBS New Zealand and has served a plethora of respected and well-known clientele.
Parish Accounting Newsletter
Quarter 1, 2019 Update
This newsletter includes articles on a new taxation bill introduced on 28 June 2018 as well as a public consultation for the Charities Act review.
The newsletter also features articles on annual financial statements and insurance premiums.
We also profile one of our Parish Accountants, Mandy Wan.
February 2019 Newsletter
This edition of the newsletter includes an analysis of the market in 2018 and what to expect in 2019.
The newsletter also features articles on our CEO's recent attendance at the Responsible Investment Association Australasia conference in Melbourne as well as the acquisition of properties from the Rātā Foundation.
We also profile our General Manager Shane Coward.
The update reports on the performance of the funds compared to their benchmarks to 31 December 2018.
Trust Investments Property Fund announced in December that after a period of due diligence, it had entered into an unconditional contract for the purchase of three commercial properties in Christchurch. The properties were purchased from Rātā Foundation (previously The Canterbury Community Trust).
Profile: Shane Coward - General Manager
Shane Coward has nearly 20 years of experience in finance and management. He has dedicated 15 of those years to Trust Management and its mission to help clients advance their charitable purposes, 12 years as the General Manager of Finance and three as the group’s General Manager.
2018 Responsible Investment Association Conference
Grant Hope, recently attended the Responsible Investment Association Australasia conference in Melbourne. It was clear to Grant that despite the increasing desire of investors for ESG investments, many Fund Managers and advisors in the room were paying little more than lip service to ESG.
2019 - What to Watch
Global markets face something of a hangover now that the long party of recent years - a period of easy monetary policies, low volatility, political stability and strong corporate earnings growth - may be over.
2018 - What Happened?!
In the end 2018 was a year to forget. It was something of a turning point in financial markets, punctuated by trade wars, rising interest rates, a fickle political climate and some high volatility.
It marked the end of 10 years of unconventional monetary policy of artificially low interest rates and quantitative easing.
Quarter Three, 2018 Update
This edition of the newsletter includes details on our upcoming Ministry Accounting Roadshows taking place throughout November and December.
The newsletter also features articles on our Christmas office opening hours as well as an update on Harbourside Centre, 16-18 Parumoana Street, Porirua.
We also profile our General Manager Property, Patrick O'Reilly.
The update reports on the performance of the funds compared to their benchmarks to 30 September 2018.
Update on Harbourside Centre,
16-18 Parumoana Street, Porirua
This property consists of two retail buildings with common car parking and tenancies ranging from 140 –750 m². The retail environment of Porirua has traditionally been split between the major shopping Centre, North City to the south, and the Mega Centre to the North.
Harbourside sits between the two retail hubs on the edge of the Porirua Estuary and adjacent to a large Supermarket and opposite the community Library.
Over the last twelve months Trust Management has undertaken work to reposition the units to provide better quality retail space, which resulted in new leases to Caci Clinic and NZ Uniforms.
Together with creating better retail spaces, Trust Management have completed a subdivision creating 9 Unit Titles.
Profile: Patrick O'Reilly - General Manager Property
Trust Management General Manager Patrick O'Reilly lives and breathes property. Boasting more than 20 years of senior leadership experience in the property industry for both renowned and growing clients, Patrick is a respected commercial manager known for delivering outstanding results.
Christmas Office Closure
It has been a busy year, both for our staff and our clients, but a very rewarding and enriching year at the same time.
Our office will be closing on Friday, 21 December 2018 and reopening on Monday, 7 January 2019.
From 7 January 2019 to 11 January 2019 our office will be open but operating with reduced staffing levels, as we encourage our staff to have a well earned break with family and friends.
We look forward to meeting up with our clients and investors again in the New Year, and we wish you all the best for the festive season.
Ministry Accounting Roadshows
We would like to invite you to our Ministry Accounting Roadshows where we will cover the following topics:
The Budgeting process; how we can assist and evaluate your budget
The 2018 Annual Financial Statements process and time frames
Monthly Reporting; a flexible approach
GST on events organised by ministry units
Payments taxed at source
We will be visiting the following locations:
Christ Church, Whangarei;
Friday 23rd November 12.30 - 2pm
St Peter’s Takapuna;
Tuesday 27th November 12.30 - 2pm
Massey Anglican Church;
Wednesday 28th November 12.30 - 2pm
Anglican Parish of Thames;
Friday 30th November 12.30 - 2pm
St Mark’s Remuera;
Wednesday 5th December 12.30 - 2pm
All Saints, Howick;
Thursday 6th December 12.30 - 2pm
Parish Accounting Newsletter
Quarter 3, 2018 Update
This newsletter includes articles on recent fraudulent activity in respect to fake supplier invoices as well as tailoring monthly reports.
The newsletter also features an article on some recent clear guidance published by IRD in respect of honoraria, koha and payment to volunteers.
We also profile one of our Parish Accountants, Angela Chen.
Quarter Two, 2018 Update
This edition of the newsletter includes details on our upcoming seminar with Zoltan Moricz on Friday 31st August.
The newsletter also features articles on our recent acquisition of 105 Wiri Station Road in South Auckland as well as the lease of 439 East Tamaki Road to O-I New Zealand.
We also profile our Investment Manager, John Williams.
The update reports on the performance of the funds compared to their benchmarks to 30 June 2018.
Lunch with Zoltan Moricz
We are pleased to welcome you to a lunch with Zoltan Moricz, Senior Director of CBRE Research in New Zealand.
Zoltan joined CBRE in 1994 and has led the New Zealand Research division since 1996.
In addition to his leadership and management roles for the department, Zoltan prepares client presentations and market reports for both general distribution and subscription. He also undertakes consultancy briefs within the office, retail, industrial, land and residential property market sectors and has extensive experience with both public and private sector assignments having undertaken work for a wide range of local government agencies and most major companies involved in commercial real estate within New Zealand.
Profile: John Williams - Investment Manager
John Williams, Investment Manager of Trust Investment, finds satisfaction in assisting charities with attaining better quality results. He describes his role as one similar to a medical professional, but in relation to financial health.
With nearly 30 years and a range of experience in wholesale funds management, John has built a reputation as an experienced and trusted professional.
105 Wiri Station Road Purchase
The Trust Investments Property Fund announced on 4th July 2018 that it has contracted to purchase a substantial industrial property in Wiri Station Road in South Auckland.
The property is undergoing major refurbishment in preparation for the infrastructure contractor, HEB Construction to take occupation and for a new 15 year net lease to commence.
Lease of 439 East Tamaki Road Warehouse to O-I New Zealand
Trust Management is pleased to announce the leasing of 439 East Tamaki Road Warehouse to ACI Operations NZ Limited trading as O-I New Zealand.
O-I Group is one of the world’s largest glass container manufacturers. This is another quality tenant secured within the property portfolio.
Trust Management - What We Do
Describing exactly what it is we do at Trust Management has always been challenging as our services are tailored to our clients unique needs.
Seeing our clients succeed is what gives meaning to the work we do, and why we relentlessly pursue continual improvement in the services and solutions we provide.
Our corporate profile sets out how we assist our clients to achieve their outcomes. It includes examples of how each area of our business has assisted clients to improve outcomes for their charitable purpose and beneficiaries.
Profile: Grant Hope CEO
By day, Grant Hope is Trust Management’s Chief Executive in charge of strategy and governance.
By night, you can quite literally find him with his hands in the dirt or attaching bait to a hook at his cherished Kaipara Harbour lifestyle block.
The Future of Finance and Accounting?
Since the creation of double entry bookkeeping 500 years ago, which was considered one of the greatest advances in the history of business, the accounting profession has not seen much innovation. However, the world of accounting is just the latest in a number of industries affected by the rise of Artificial Intelligence (AI).
AI has created a tsunami of innovation and that innovation has increasingly impacted on the accounting industry. So here are our views on the future of AI as it pertains to the accounting industry.
Quarter One, 2018 Update
This edition of the newsletter includes our Corporate Profile which outlines what we do and how we assist our clients to achieve their outcomes.
The newsletter details the future of finance and accounting, exploring how the world of accounting is just the latest in a number of industries affected by the rise of Artificial Intelligence.
We also profile our CEO, Grant Hope.
The update reports on the performance of the funds compared to their benchmarks to 31 March 2018.
Hedging Currency Risk
Investing in international markets has benefits and costs. A key risk that needs to be carefully managed is the prospect of adverse exchange rate movements. This risk can be hedged using currency contracts.
Strategic Asset Allocation - Balanced Fund
In October 2016, Trust Management reviewed the strategic asset allocation of the Balanced Fund in light of revisions to the long-term financial market assumptions of each asset class.
The review focused on the Fund’s allocation to International Fixed Interest, which had become a much less attractive asset class with a lower expected return and higher risk profile than assumed previously.
Show Me The Money
You may remember Cuba Gooding Jr.’s immortal line from the movie Jerry Maguire, “Show me the money!” Well, that’s what financial statements do. They show you the money. They show you where your Trust’s money came from, where it went, and where it is now.
Financial statements tell the money story of your Trust – what it has been doing and what it has to carry it into the future.
There are three main financial statements:
Profit and Loss or Income Statement
Profile: Anne Edwards
Anne Edwards, Trust Management’s General Manager of Finance, believes her thirst for knowledge, attention to detail and passion for the stories numbers tell are the traits that allow her to excel at her job.
A newer member of the Trust Management family, Anne came to the company in 2015 with an impressive career background. With almost 30 years in the industry, she spent nearly half of her career as Associate Director at UBS New Zealand and has served a plethora of respected and well-known clientele.
Property Fund Purchases A Supermarket
The Trust Investments Property Fund announced today the purchase of a Countdown supermarket in Hornby Christchurch.
The property located at 17 Chappie Place was purchased through a tender process from the listed property company, Investore and settlement is due on 23 March.
The purpose built property is modern in nature having been developed in 2010 with a 20 year lease commencing in 2012. The property was purchased for $21.5m at an attractive initial income yield of 6.30%. The purchase is accretive to the current portfolio yield and increases the property portfolio from $108.8m to $130.30m.
End of Year Update 2017
This edition of the newsletter includes important information on a number of changes made by Trust Management to codify ethical screens across all Funds.
The newsletter also details the review of the Balanced Fund, following revisions to the Fund's asset allocation. We also profile our General Manager of Finance, Anne Edwards.
The update also reports on the performance of the funds compared to their benchmarks to 31 December 2017.
Quarter Three, 2017 Update
This edition of the newsletter includes important changes to the Statement of Investment Policies and Objectives (SIPO's) for our Group Investment Funds.
The newsletter also provides information about our Property Fund, including the latest acquisition and leasing activity, as well as further articles in our educational series focused on investment principles.
We also report on the performance of the funds compared to their benchmarks to 30 September 2017.
421 East Tamaki Road
After nearly a year of discussions with the Receiver for Pumpkin Patch, Trust Investments Property Fund and the St Johns College Trust Board - as 50/50 owners of 433, 439 & 441 East Tamaki Road, have purchased the Freehold land at 421 East Tamaki Road.
Farmers Trading Company - New Tenant
Farmers Trading Company ("Farmers") is a new tenant with the Trust Investments Property Fund. Farmers has taken the retail premises on Broadway which was previously occupied by PaperPlus.
Farmers is a very experienced retailer having been in business for 100+ years. It is one of the largest retailers in New Zealand with 60 department stores throughout New Zealand.
The Efficient Frontier
The Efficient Frontier is a tool that enables investors to choose their target asset allocation, or the exposure to each asset class. The Efficient Frontier represents the set of optimal portfolios, those that offer the highest expected return for each level of risk.
Measuring Investment Returns With Cashflows
Trustees of charities need to regularly monitor the returns of their investment portfolios. Returns can be affected by cashflows, and it is important that Trustees understand what is being presented to them.
This article considers the measurements of returns when an investor is regularly taking money in and out of a fund. We explain with an example the difference between a time-weighted return and a money-weighted return.
Maori Television Services Opens Office
433 East Tamaki Road
In December 2016 Maori Television Service ("MTS") held a Karakia at 433 East Tamaki Road signalling the commencement of fitting out its new premises.
After extensive fitting out of the premises, the formal opening of the Maori Television office premises and television studio was undertaken on 24 August.
This commenced with a dawn ceremony which was attended by the Minister for Maori Development Hon te Ururoa Flavell, members of Parliament, iwi, representatives of the landlord and the Manager.
Quarter Two, 2017 Update
This edition of the newsletter includes an invitation to a lunch seminar with Cameron Bagrie, Chief Economist for the ANZ.
The newsletter also provides information about activity within the Property Fund, including the latest acquistion and leasing. We also report on the performance of the funds compared to their benchmarks to 30 June 2017.
Trust Investments Property Fund Acquires Auckland Industrial Property
The Trust Investments Property Fund has purchased an industrial property in the popular Airport Oaks area near Auckland Airport.
The property located at 2 Freight Place, was purchased through a tender process and settlement is due later in August.
Patrick O'Reilly Elected President of the Property Institute of NZ
Patrick O’Reilly, Trust Management’s General Manager Property has been elected President of the Property Institute of New Zealand.
The Property Institute has over 2,500 members throughout New Zealand and the world. It was formed in the year 2000 to act as the voice of property professionals.
Trust Management Supports Property Careers Expo
A number of the Trust Management property team provided support to the Property Institute of New Zealand (PINZ) by manning the property careers stall at the Careers Expo held at the ASB Stadium in May.
The aim was to highlight to school leavers that there is a great variety of careers within the property industry sphere. The photo shows Felicity Berry and Thomas Snedden from Trust Management - before the doors opened to the expo!
Property Fund - Stellar Performance
The Trust Investments Property Fund (“Property Fund”) contributes data to the MSCI/IPD New Zealand commercial property return database. The performance index produced reflects the returns from 422 commercial properties within New Zealand.
The 31 March 2017 results have been released, with the Trust Investments Property Fund achieving the top property portfolio performance ranking for 1 year and 2nd for 3 years.
439 East Tamaki Road Leased
Trust Management is pleased to announce the leasing of 439 East Tamaki Road to Cottonsoft Limited. Cottonsoft is a well-known supplier of paper towels and toilet paper.
Cottonsoft will be using the warehouse for product storage, predominantly on pallets. The lease is for a one year term and allows time for refurbishment works to the office area, before securing a long term tenant for the site.
IZone Recognised at PCNZ Property Awards
With 83 properties being entered into the Property Council of New Zealand Property Industry Awards 2017 the competition was very high. Trust Management, in conjunction with The Warehouse Limited (“TWL”), submitted the TWL South Island Distribution Centre at IZone Industrial Park for the Industrial Property Award.
At the Awards Dinner held on Friday 16 June at the Spark Arena, the Property Fund’s IZone property was recognised with a Merit Award. The judges recognised the complexity of the project, undertaking a building expansion adjoining a fully operational distribution centre.
Izone Drive reaches practical completion
We are pleased to advise that on 20 March 2017 Practical Completion for the building expansion was achieved. The project was very successful for all involved.
The building is now one of the largest industrial buildings in the South Island being just under 50,000sqms (5 hectares) on a 10 hectare site – it is truly an impressive property to walk around.
Quarter One, 2017 Update
This update contains information about our office relocation, as well as the activity within our Property Fund, including information in relation to the Izone Driv.
We also provide two more articles from our educational series, and report on the performance of the Funds to 31 March 2017.
Another clean bill of health
Trust is important to our Clients and is at the heart of our business. Trust Management engages the professional services firm PwC to carry out independent audits of its processes and internal controls to assure our clients that our systems and internal control procedures are robust and based on best practice.
The outcome of PwC’s most recent audit means our clients can have complete confidence in the way we look after their organisations and manage their financial affairs.
Calculating Investment Performance
Trustees of charities need to regularly monitor the returns of their investment portfolios. Returns can be measured in different ways and it is important Trustees understand what is being presented to them.
Investors typically expend considerable resources to determine their strategic asset allocation. Unless there is a change in investment objectives, or a fundamental shift in financial markets, it is important that the agreed strategy is maintained.
2017 New Year, Update
This update contains the sad news of the passing of Archbishop Brown, and congratulations to New Year's Honours winners.
We also outline the changes to the Balanced Fund asset allocation and report on returns to 31 December 2016.
Pumpkin Patch Update
We provide an update with respect to the properties leased to Pumpkin Patch, the latest news from the Receiver, and the impact on the portfolio of the Maori Television Services leasing, as well as provide details of the October valuation.
Maori Television Services Leasing
We are very pleased to announce the leasing of 437 and 441 East Tamaki Road to Maori Television Services ("MTS") on a 15 year lease. The leasing reduces the Fund's exposure to Pumpkin Patch.
Included within the article is a link to a "fly through" of the new offices provided by MTS.
Quarter Three Update
This update contains information about the activity within our Property Fund, including information about the Pumpkin Patch receivership and IZone Drive partial sale.
We also outline the changes to the International Share Fund and report upon the returns to 30 September 2016.
Pumpkin Patch Receivership
On 26 October 2016, the Board of Pumpkin Patch Limited (“PPL”) placed the company into Voluntary Administration. On the same day ANZ Bank appointed KordaMentha as Receivers.
The Trust Investments - Property Fund owns a 50% share in two properties leased by Pumpkin Patch. This article provides further information about the impact of the receivership.
Trust Investments Property Fund acquires a ground lease property.
Trust Management is pleased to advise that the Trust Investments Property Fund (“Fund”) has confirmed an unconditional contract to purchase a 99 year terminating ground lease property at 238-246 Great South Road, Papakura, Auckland.
Trust Investments - International Share Fund screens out Tobacco and Controversial Weapons
Trust Management is pleased to advise that the Trust Investments International Share Fund will be screening out companies whose primary business activity is tobacco and controversial weapons, while still providing a broad exposure to the asset class and reasonably close tracking of the index.
Sale of 50% Interest in IZone Drive Property
Trust Management is pleased to advise that the Trust Investments Property Fund has confirmed an unconditional contract to sell a 50% interest in the IZone Drive property to the New Zealand Methodist Trust Association (“NZMTA”).
Trust Management appoints Annabel Cotton to Board of Directors.
Trust Management is pleased to advise that Annabel Cotton has been appointed to the Board of Directors for Trust Management. Please join us in welcoming Annabel, to read more about Annabel, please click on the link.
Quarter Two Update
This update contains a link to subscribe a friend to our quarterly updates, as well as announcing our success at the Property Institute of New Zealand 2016 awards. We also provide information about what is happening in the investment markets, and give an update on the performance of each of our Funds.
Trust Management obtains Market Service Licence
Trust Management is pleased to announce that the Financial Markets Authority has granted Trust Management a license as a manager of a Managed Investment Scheme ("MIS").
Property Business of the Year
Trust Management’s Property Team has carried on their success from the RICS awards by winning the Property Business of the Year Award from the Property Institute of New Zealand.
Fund Management Team of the Year
Trust Management is pleased to announce that it has won the Fund Management Team of the Year award for the second year running, for the Trust Investments - Property Fund.
Commercial Property Outlook
In March 2016 CBRE held a property market briefing at Trust Management’s offices. The presentation included CBRE’s latest economic and property research, comparing New Zealand to other countries and more specifically Auckland to other international cities.
Seven Factors to Consider When Choosing an Active Manager
Many charities appoint an active fund manager to look after their investment portfolio. Active managers research a wide range of shares, bonds and properties, and select those they expect to generate superior returns.
Risk and Volatility
There are many risks of investing, such as getting a lower return than expected, the market price falling below the original purchase price, and the value of the investment being volatile. Volatility is the extent to which the price of an investment fluctuates. Some investments are much more volatile than others.
Accounting for Donated Goods and Services
For all financial periods starting on or after 1st April 2015, Tier 1 and 2 Charities (mainly large and medium size charities) will need to apply the new “not for profit” accounting standards.
Key Features of Shares
Most investment portfolios of charities have an allocation to shares. A share represents a stake in a company. A typical share fund includes shares in a wide range of different companies.
Diversification and Asset Class Correlations
Diversification is an often touted and misunderstood investment principle. Diversification means splitting funds among a group of investments instead of concentrating funds in a single asset, single asset class, or highly correlated asset classes.
How Unit Pricing Works
This article seeks to explain how unit pricing works, and how the use of unit pricing and registry systems provide equitable outcomes for all investors and/or account holders.
Most investment portfolios of charities have an allocation to bonds. Bonds are less risky than shares, but may still generate negative returns from time to time. A bond can be thought of like a loan...
Balanced Fund Review
On an annual basis we review the investment strategy and asset allocation of each of our Funds. We recently completed our review of the Balanced Fund, a copy of which is available via the link below.
The review concludes that the Fund is highly suited to charitable investors who require a balanced, highly diversified investment portfolio with a strong focus on income.
The three and five year income and capital returns of the Balanced Fund have achieved its investment objectives and exceeded our expectations.
Trust Management launches 101 Series
Trust Management provides services to a diverse range of charities. The services we offer cover a wide range of disciplines and the Trustees who serve on the Boards of our clients come from varied backgrounds, some with in-depth commercial knowledge in specific areas others committed volunteers who have had little exposure to the investment or business world.
It is with this diversity of knowledge in mind, that Trust Management is developing an educational series of papers, aimed at giving a basic oversight of key topics using simple terminology, in easy to understand language. These papers are not intended to be the definitive guide on their given topic, but seek to provide enough explanation that readers will be able to understand the overall concepts of each topic.
John Williams appointed to NZX's SmartShares Board
John Williams, Investment Manager for Trust Management, has been appointed as an independent Director of the NZX's SmartShares Board.
John heads up Trust Management's investment advisory and investment management functions.
September Quarter Update
Our new format newsletter contains information about what is happening in the charitable sector, Trust Management's service offering, and investment markets.
This edition introduces two new members to our Executive Management team, as well as describing two important changes to our Group Investment Funds. Lastly we provide an update on the performance of all our Group Investment Funds.
Fossil Fuels Screen
Over the past several months, Trust Management has been extensively researching the impact of excluding companies whose major business activity is the extraction and/or production of fossil fuels, from our Sustainable Australasian Share Fund.
We summarise the outcome of the research conducted and the changes to our Fund in the attached article.
Managing Bonds for Income - A Change in Approach
Trust Management continually evaluates the way in which we manage our clients’ assets and we are always striving to deliver investment products and services focused on the needs of charities.
To this end, we have been conducting extensive research and modelling on an alternative management style for New Zealand Bonds, a management style which focuses on the generation of income.
Trust Management Appoints Patrick O'Reilly
Trust Management has appointed Patrick O’Reilly, former General Manager of DNZ Property Fund, as its new General Manager Property.
With over 20 years of senior leadership experience in the property industry, Patrick is a proven commercial manager who has delivered exceptional results within listed and private entities, bringing a strategic approach to every element of his role.
Trust Management Supports West Auckland Hospice
Here at Trust Management, we are focused on equipping charitable trusts with the right resources, advice and support to succeed through good advice and quality investment funds. We are also passionate about supporting local causes through sponsorship opportunities.
Therefore, we were proud to be a sponsor of West Auckland Hospice’s recent Absolutely Fabulous Fashion Show. The show is a charitable event designed to raise funds to support Specialist Palliative Care and provide assistance for West Aucklanders during terminal or life-limiting illness.
RICS Fund Management Team of the Year
Trust Management’s Property Team confirmed its status as industry-leading fund managers with the news that they won last night’s Fund Management Team of the Year Award at the 2015 Royal Institute of Chartered Surveyors (RICS) Awards.
The two direct property funds managed by Trust Management that were nominated for awards have consistently outperforming the market and providing long-term, sustainable returns.
Income from your portfolio
Relative bond and dividend yields have changed post the Global Financial Crisis, and while this may be a temporary shift, charities need to be aware of the implications and temper their expectations for income.
This new relationship poses a challenge for all investors, particularly fiduciaries with an investment objective of making distributions to beneficiaries.
Trust Management Appoints Anne Edwards
We are pleased to advise that Anne Edwards has been appointed to the role of General Manager Finance following Shane Coward’s shift into the role of General Manager of the business.
Anne joins us from the New Zealand offices of Swiss bank, UBS where she was Associate Director for the past 13 years. Prior to UBS, Anne was an Audit Manager for PWC both in New Zealand and the UK.
A recent New Zealand Herald article highlighted the difficulties faced by many investors wanting to buy New Zealand bonds directly. We outline the advantages to charities of investing in NZ bonds through a Group Investment Fund.
Trust Management Supports Mental Health
Trust Management is proud to have sponsored Malcolm Law in his quest to conquer 50 mountain marathon in 50 days. He is doing all this just to raise money for Mental Health Foundation of NZ.
Property Fund Newsletter December 2014
Over the last quarter, positives for the fund include $13.1 million of new capital investment into the fund and distribution growth of 2.76% year to year. We have also faced a valuation challenge that we believe is of a short-term nature and will be resolved.