We are an intergenerational investor, that operates under an endowment model of investing. The key feature of an endowment fund is that the principal amount is typically preserved (in real terms), meaning it remains intact while the investment income generated from it – such as interest, dividends, or capital gains – is used to fund the organisation’s operations, programs, or specific projects.
These funds are designed to exist in perpetuity, ensuring a stable and reliable income source over the long term. To achieve this, Quayside sets return objectives, evaluates the levels of risk they are willing to bear to achieve that return, the distribution requirements to their supporting organisations (e.g. dividends to BOPRC) and then invests to achieve these objectives. Different professional investment managers are engaged across a range of mandates, which may have differential risk and return expectations while ensuring the aggregate composition of the portfolio meets the organisation’s objectives. This approach supports the operating budgets of their supported organisation – in our case, BOPRC – but also ensures the fund’s longevity, allowing it to continue providing support in the future.
We are hugely proud of the positive impact we’ve had over the last 30+ years, contributing to the BOPRC and the services they provide our region.
The Quayside portfolio is made up of three distinct mandates :
The Port of Tauranga shareholding, a Non-Port Investment Portfolio, and Special Purpose Assets – defined as the Rangiuru Business Park and Tauriko Land Holding. Each subset has its own unique composition, objectives, risks and measures.
We believe that our investment model can be used for other investment entities who want to make a lasting impact. Our strategy enables a portion of the profits made each year to be invested in contributing to the region’s economic, environmental and social growth through Council initiatives.
All figures as at December 2024
Quayside holds a 54.14% share in the Port on behalf of Council and this represents the largest asset in the investment portfolio. The shareholding has been classified as a “strategic asset” of Bay of Plenty Regional Council in terms of the Local Government Act 2002 (LGA). It cannot be sold or reduced without Council consent. By virtue of this, Quayside has considerable geographic and concentration risk which cannot be diversified and for which the fund is not directly compensated for (i.e. these risks are diversifiable where other market participants do not expect return premia for concentration). Where possible, Quayside will mitigate this by diversifying the investment portfolio.
Outside of the shareholding in the Port, Quayside’s investment strategy is to focus on diversification to maximize the risk-weighted return of the portfolio. This is achieved by investing in multiple asset classes such as listed equities, private equity, real assets, and other alternative asset classes. Exposure to these asset classes may be gained through managed funds or directly.
Our objective is to manage our investment assets for a commercial return, providing sustainable growth and income to Council, which filters through to the wider community. We take a responsible, commercially focused and collaborative approach to investment, with our structure supporting the agility required to take advantage of new opportunities.
Rangiuru Business Park and a landholding at Tauriko comprise the smallest segment of our total investment portfolio and what we refer to as Special Purpose Assets.
These are regional benefit assets that aren’t intended to meet Quayside’s investment hurdle rate, given the significant resourcing, time, and different risk and return profile from the rest of the portfolio. Therefore, they are taken on a case-by-case basis, in support of our shareholder, Toi Moana Bay of Plenty Regional Council.
Our approach to investing is framed by a set of clearly defined overarching beliefs that drive investment decisions. Quayside’s investment beliefs are:
| QUAYSIDE’S INVESTMENT BELIEFS | |
|---|---|
| Asset Allocation | Setting an appropriate Strategic Asset Allocation to best support objectives and risk tolerance is a key driver of long-term success. |
| Long-Term Investment Horizon | Quayside’s investment horizon is perpetual and intergenerational which enables it to capitalise on illiquidity premiums, market inefficiencies, participate in a broad range of asset classes and mitigate the impact of volatility to deliver superior returns. |
| Diversification | Diversification both within and across asset classes has the potential to improve the risk/return trade-off of an investment portfolio. |
| Risk and Return | Higher levels of return are typically associated with higher levels of risk. Less liquid investments should offer higher levels of potential returns to compensate for the risk of not being able to sell quickly. |
| People Matter | Excellent governance and management together with well-defined decision-making structures is the pathway to excellent results. Appropriately qualified parties should be used to advise and implement the investment strategy. Quayside should be mindful of conflicts of interest that some investment providers may have. |
| Rebalancing & Market Dislocations | At times markets may become dislocated from fair value that there is a high probability of improving returns by tilting away from the strategic asset allocation. Deviations must be managed with rigor as the Strategic Asset Allocation has been designed to meet organisation objectives. |
| Active Management | Active management can add excess return that is greater than the cost of engaging active managers. Markets are not always efficient, this differs by asset class and instrument. |
| Costs | Taxation and costs can materially impact returns and should be considered in the investment decision making process. Whilst costs matter, Quaysides primary focus is on risk-adjusted returns net of all costs. |
| Responsible Investment | Considering Environmental, Social and Governance related factors in investments will benefit the long-term risk and return of Quayside. Refer to the Responsible Investment Policy. |
| Intergenerational Equity | Quayside believes that it must treat current and future generations in the region fairly and will take this into account when making important decisions on its investments. |
Our commitment to regional benefit is primarily delivered through our responsible commercial investments, encapsulating our long-term vision – Invested in Our Future : Mauri Ora Roa. We exist to create intergenerational wealth for the Bay of Plenty community. Specifically, our regional benefit is delivered through:
We have three core endowments that set us apart.
Our team of locally based industry experts enhances these endowments, all working together to build a fund that gives the Bay of Plenty a lasting competitive advantage.
We are an intergenerational investor. Our investment horizon is perpetual, enabling us to capitalise on illiquidity premiums market inefficiencies, participate in a broad range of asset classes and mitigate the impact of volatility to deliver superior returns.
We are operationally independent and separate from our owner, Toi Moana Bay of Plenty Regional Council. Whilst we are their trusted advisor and work in alignment with the jointly agreed annual Statement of Intent, Quayside operates under its own management. In alignment with our mandate, we invest commercially to meet our strategic objectives.
Quayside has been set up to operate at arms’ length from our 100% owner, Toi Moana Bay of Plenty Regional Council. It has also established a strong governance model, with highly experienced Directors, including clear delegation structures and board oversight to support the achievement of our long-term vision, and maintain stakeholder and public confidence.
We continue to review regional investments that add value to our portfolio, where commercial returns deliver above benchmark returns and contribute positively to the social, environmental and the cultural fabric of the region.
