Māori investment thriving
Read insights from Dylan Lawrence on the rise of Māori investment activity and the innovative approaches iwi are using to enable their business growth.
"Tēnā te ngaru whati, tēnā te ngaru puku. There is a wave that breaks, and there is a wave that swells."
This Māori whakataukī is a fitting way to describe the groundswell of investment growth occurring with iwi at the moment.
Here in the investment team at New Zealand Trade and Enterprise (NZTE), we are seeing some exciting numbers and trends emerging in the way iwi are engaging with business partners.
By the numbers
This past year, we've been a part of a significant increase across the board in Māori investment activity.
In the past financial year, our pipeline of investment opportunities from iwi and Māori entities grew 130 per cent to 113 deals.
The value of that pipeline of Māori investment opportunities is estimated at more than $500 million.
Our pipeline comparison also indicates where this growth is occurring as Māori look to raise capital to accelerate growth – noting a large increase in activity in the technology sector.
Now let’s look at some of the key trends driving this significant and exciting growth.
Global partnerships
The New Zealand story is unique, and Māori are central to that story. We're seeing rapid growth in the number of global businesses and investors keen to tap into New Zealand and partner with iwi.
Our NZTE investment team includes 11 Māori practitioners, led by Rangi Ririnui, who put a lot of effort into guiding these international businesses in their interactions with Māori.
We aim to educate investors, so they understand that for Māori, business partnerships are more than just a commercial arrangement. We guide them on a range of important subjects such as the key cultural values, societal structure and the importance of first meetings.
Some of the recent global partnership opportunities for Māori that we've seen have included:
Collaboration with North American businesses in the aquaculture industry.
Sustainable energy developments including solar, wind and hydrogen.
Strong interest from Japanese investors in partnering with iwi in the housing and off-site manufacturing industry.
Approaches from Australian investors looking to build long-term partnerships in the food and beverage sector.
This level of interest also creates challenges for iwi, in particular:Determining who they enter into global partnerships with – the first party that approaches is not necessarily the best.
Establishing an active role in the relationship, rather than becoming a passive investee. Ultimately, the deal needs to foster local benefits, sustainable prosperity and intergenerational wellbeing for their people.
Innovative approaches to participating in capital markets
Many iwi are keen to be involved with capital markets and other forms of investment. They tend to have a large asset base, but the nature of their settlement packages means that cash is not always readily available to invest. However, iwi are now starting to reimagine their asset portfolios to leverage more commercial opportunities.
Recently we have seen iwi partner with established aquaculture companies operating in industries with traditionally high barriers to entry. Partnering with these companies who possess existing capital and capability has enabled iwi to gain a foothold in the sector.
nother approach is where iwi have leveraged their reversionary rights and launched iwi-private sector partnerships to create long-term value and future revenue streams.
Earlier this year we saw Ngāi Tai ki Tāmaki exercise its option to purchase the Macleans College land in coalition with six iwi and in partnership with Hāpai Commercial Property LLP.
This significant investment deal not only reinforces the iwi's mana whenua, but also provides it with an ongoing commercial return to reinvest.
Iwi collaboration with iwi
Iwi-to-iwi collaboration is increasing too. Historically, this collaboration was predominantly based on whakapapa – meaning iwi tended to work with those geographically adjacent to them or those they had partnered with in the past.
However, they are beginning to extend that traditional partnership concept to iwi whose commercial interests align.
One example of this is the Iwi Collective Partnership (ICP), a limited partnership comprised of 19 iwi fishing companies around Aotearoa who have pooled their fishing quota under the Māori fisheries settlement to achieve economies of scale in commercialising this quota.
Our investment team is actively supporting iwi-to-iwi investment collaboration across a range of sectors including horticulture, housing, alternative dairy, commercial property and aquaculture.
All these forward-thinking approaches are enabling iwi to drive value beyond their current balance sheet and transfer capability and knowledge back to the iwi over time.
Looking ahead
NZTE is proudly supporting Māoridom to create an iwi-owned and Māori-led venture capital fund. The vision is to combine investment resources for the benefit of all and enable Māori to participate as more active investors in the fast-growing technology sector.
Overall, we expect Māori investment growth to continue, the trend of collaboration between iwi to accelerate, and for links with foreign investors to grow markedly.
Here at NZTE, we are scaling our capability to support Māori. It's our ambition to be a competent, active and connected partner for Māori in the investment ecosystem.
Ultimately, iwi investment growth creates the types of economic activity and job opportunities that benefit all of Aotearoa.
"Nā tō rourou, nā taku rourou ka ora ai te iwi. With your food basket and my food basket the people will thrive."
NZTE is the government agency charged with helping New Zealand businesses grow internationally, for the good of New Zealand.
For more information on how the NZTE Investment team supports Māori and iwi please visit connect with our Investment team.
