Ngāti Toa Rangatira and OneFortyOne ESG Transaction

Ngāti Toa and OneFortyOne announce the next step in the evolution of their relationship.

Tihei Mauri ora!

Armillary Private Capital would like to congratulate both Te Rūunanga o Toa Rangātira and OneFortyOne on the seed funding of Ngāti Toa Rangātira’s ESG Fund which has been established to sustainably support future generations.

Background

Ngāti Toa Rangatira’s Treaty settlement included Te Rūnanga o Toa Rangatira (Ngāti Toa) receiving forest land licensed by the Crown to Nelson Forest Products (now OneFortyOne).

What started as a rental arrangement has grown over the last three years into a deeper and more meaningful relationship. Ngāti Toa and OneFortyOne have worked hard to better understand each other’s needs, goals and aspirations, and to help each other achieve them.

Some examples of this relationship include OneFortyOne’s Kaituna Sawmill assisting TOA ITM with product sourcing and product referrals and Ngāti Toa assisting OneFortyOne with securing the resolution of long overdue easement issues from the Crown.

In July 2022 the relationship reached an important new milestone.

Ngāti Toa and OneFortyOne agreement

Ngāti Toa and OneFortyOne have agreed an advance rental payment by OneFortyOne of over $20 million to form the capital of the Toa Rangatira ESG Fund. The fund will support Ngāti Toa to achieve its direct investment infrastructure goals in social housing, education, health, social services and an investment in living timber.

In 2020 Ngāti Toa started to look at its capital flows to see if they could be securitised to facilitate capital formation as it went about building the capital resources necessary to exercise its Treaty Settlement opportunities.

The OneFortyOne proposal ticked all the boxes: a high credit quality counterparty with robust, diverse earnings streams across Australasia, backed by like-minded pension and sovereign wealth funds. Ngāti Toa worked with OneFortyOne to generate a compelling outcome from relationship, value and risk perspectives.

Investing in living timber

Ngāti Toa wants to invest in harvest timber, it creates jobs and employment. Forestry is one of the very few asset classes that is uncorrelated to fixed interest or equities, and some managed harvest forests in the Northern hemisphere have histories of centuries of production and carbon sequestration.

Ngāti Toa and OneFortyOne have commenced discussions on the establishment of a broader relationship to enable Ngāti Toa to invest in the living timber on its land. This investment relationship, which will involve the sharing of costs and revenues, will produce overall better returns for Iwi than rentals and stumpage, but perhaps more importantly it will preserve rentals to support diversified investment returns and encourage managers to invest in infrastructure with long term committed capital partners.

For this generation of Iwi Māori, the discounting of rentals for a finite period and their payment as a lump sum, will allow direct investment in their rohe to achieve ESG outcomes.

Ka rawe OneFortyOne me Ngāti Toa! Hei iwi Toa, Hei iwi Rangatira!