Tainui to change investment strategies

Tainui Group Holdings is set to change the way it spends money, announcing plans to rework investment strategies over the next few years.

The commercial arm of WaikatoTainui, which reported a net profit of $45.1 million for the 2012 financial year, reviewed its capital spending after sinking close to $21m into the development of Te Rapa retail hub The Base.

Chief executive Mike Pohio said as a result TGH would be pulling back from further expansions at The Base and look at new avenues for investment to generate faster returns.

The majority of TGH’s assets sit in property, with new plans for a 700-section residential development ‘‘The new investment strategy builds on the fact that we have capacity, and a strong reliable earning stream.’’ Mike Pohio Tainui Group Holdings chief executive at Rotokauri in the works, but Pohio said it was time to diversify its investments.

‘‘We need higher returns more quickly, that is than property investment can give us. The new investment strategy builds on the fact that we have capacity, and a strong reliable earning stream.’’

That new strategy is a twopronged approach.

The group will be developing properties around New Zealand and selling them on completion.

It will also be moving into capital investment, with plans to put funds into at least one medium-to-large private business over the next three to five years.

Pohio said TGH would be looking to invest in established companies with good growth prospects on the hunt for fresh capital, or with shareholders wanting to sell or dilute their interests.

He confirmed that TGH would be a long-term investor and said the group has created a chief investment officer role to oversee its investment schemes.

TGH is currently recruiting for the role.

Development-wise, Pohio said the focus was now on pushing the Ruakura inland port and mixed development site forward.

TGH has lodged a private plan change application with the Environmental Protection Authority and Pohio said he was hoping to have resource consent applications for the project in as early as a year from now. The first part will be a 2000-section housing development.

The Ruakura complex is projected to bring $3 billion in investment into the Waikato, pump a further $4.4b into the region’s economy and create between 6000 and 12,000 fulltime jobs. Pohio said TGH commissioned reports showed that once finished, it would contribute $14 million annually in rates to the council.