Weekend Herald

New Zealand’s rich­est uni­ver­si­ties

The NZ univer­sity rich list

- Business · Finance · Investing · Charity · Society · New Zealand · Auckland Region · Otago · Victoria City · Canterbury · Canterbury of New Zealand · United States of America · Harvard University · Christchurch · University of Auckland · University of Canterbury · Albany · Massey University · University Foundation · Wellington, New Zealand · Victoria University in the University of Toronto · Australian Department of the Prime Minister and Cabinet · Waikato · Graeme Hart · University of Waikato

New Zealand’s uni­ver­si­ties teach more than 100,000 stu­dents, own huge tracts of prime cen­tral city real es­tate and have hun­dreds of mil­lions of dol­lars of do­na­tions man­aged by taxfree char­i­ties. With the sec­tor one of the loud­est in claim­ing Covid- in­duced poverty fol­low­ing the col­lapse of the in­ter­na­tional stu­dent mar­ket, busi­ness in­ves­ti­ga­tions re­porter Matt Nip­pert pulls apart an­nual re­ports to as­sess top- end salaries, fundrais­ing and in­vest­ment­man­age­ment prow­ess to rank our rich­est ter­tiary in­sti­tu­tions.

The New Zealand univer­sity sec­tor i s made up of eight in­sti­tu­tions which col­lec­tively own $ 11.4 bil­lion in net as­sets, gen­er­ate $ 4.3b in op­er­at­ing rev­enue each year, and have char­i­ta­ble en­dow­ments ap­proach­ing 10 dig­its.

Which­ever way you slice the num­bers, the top end of ter­tiary study is big busi­ness. But some uni­ver­si­ties are do­ing bet­ter than oth­ers.

By size, New Zealand’s uni­ver­si­ties fit into three tiers. Auck­land ( 34,521 stu­dents) is eas­ily the coun­try’s largest, with the mid­dle band com­pris­ing AUT, Massey, Otago, Vic­to­ria and Can­ter­bury ( around 20,000 stu­dents). Waikato ( 10,617) fol­lows closely be­hind, with Lin­coln ( 2633) trail­ing by some dis­tance.

The bulk of univer­sity fund­ing, for both teach­ing and re­search, is pro­vided by cen­tral gov­ern­ment. Al­ter­na­tive in­come streams — from stu­dent fees, do­na­tions and cap­i­tal man­age­ment — is what dif­fer­en­ti­ates in­sti­tu­tions.

All New Zealand uni­ver­si­ties have now set up foun­da­tions, with some com­ing later to this fundrais­ing party than oth­ers. These char­i­ta­ble struc­tures en­cour­age do­na­tions by en­abling donors to claim tax cred­its and typ­i­cally man­age funds for spe­cific pur­poses, while pro­vid­ing uni­ver­si­ties with a sup­ple­men­tary as­set base and in­come stream.

While puny in com­par­i­son to en­dow­ment funds in the US Ivy League or Oxbridge ( Har­vard’s world- lead­ing en­dow­ment fund, for in­stance, i s worth $ 64b), the pool of funds held by New Zealand univer­sity foun­da­tions is not in­signif­i­cant and now col­lec­tively to­tals $ 660 mil­lion.

Foun­da­tion oper­a­tions at Auck­land and Otago are well- ad­vanced, ac­count­ing for three- quar­ters of the na­tional to­tal, and pro­vide each univer­sity with more than $ 10m in an­nual fund­ing.

In an ef­fort to bet­ter un­der­stand the sec­tor — which owns $ 11b in real es­tate — the Week­end Her­ald has built rank­ings to as­sess univer­sity wealth, tak­ing into ac­count a num­ber of met­rics.

Net as­sets de­ter­mine ac­cu­mu­lated wealth, net as­sets per stu­dent al­lows bet­ter com­par­i­son be­tween in­sti­tu­tions of dif­fer­ing scale, and the mar­ket in­di­ca­tor of av­er­age ex­ec­u­tive salaries pro­vides an ex­ter­nal as­sess­ment of pres­tige. Fi­nal rank­ings are de­ter­mined by rel­a­tive per­for­mance on all three mea­sures.

It should be no sur­prise that the top of these rank­ings is dom­i­nated by older uni­ver­si­ties: age pro­vides time to grow as­sets — and also a deep pool of for­mer stu­dents who can po­ten­tially be re­cruited as donors.

1st: Univer­sity of Can­ter­bury

Christchur­ch’s Can­ter­bury Univer­sity, founded in 1873, is the coun­try’s sec­ond old­est and earns its place at the top of this list largely due to its na­tion­ally- lead­ing net as­sets per stu­dent and ex­ec­u­tive re­mu­ner­a­tion.

While the Univer­sity of Auck­land has a big­ger gross bal­ance sheet, Can­ter­bury’s $ 1.8b in net as­sets needs to cater for fewer than half as many stu­dents as Auck­land. And de­spite the dif­fer­ence in scale, ex­ec­u­tive salaries at Can­ter­bury still man­age to eclipse their north­ern ri­val: the 14 staff iden­ti­fied as key in an­nual re­ports earned av­er­age salaries of $ 368,071, just pip­ping their Auck­land coun­ter­parts.

The wider univer­sity holds $ 151m in in­vest­ments, pre­dom­i­nantly in listed eq­ui­ties with a sprin­kling of pri­vate eq­uity place­ments. Its Univer­sity of Can­ter­bury Foun­da­tion added to this to­tal by last year pulling in $ 5.5m in do­na­tions. The Foun­da­tion holds $ 34m in net as­sets, and ap­pears to have gen­er­ated rel­a­tively low re­turns last year — a bull mar­ket for eq­ui­ties — of only 11 per cent.

2nd: Univer­sity of Auck­land

The sole heavy­weight in this divi­sion has nearly t wice the num­ber of stu­dents as its near­est ri­val at AUT. That size is largely re­spon­si­ble for Auck­land’s league- lead­ing $ 1.3b in op­er­at­ing rev­enue and a cen­tral- city prop­erty port­fo­lio that has seen $ 1b in de­vel­op­ment over the past decade and is now worth nearly $ 4b. Its art col­lec­tion alone i s re­ported to be worth $ 24m.

Auck­land’s fund- rais­ing prow­ess is con­sid­er­ably boosted by strong links to the wealthy medical sec­tor, and helped its char­i­ta­ble foun­da­tions rake in $ 31m last year — nearly five times the to­tal of its near­est ri­val, Otago. A sin­gle $ 16.5m gift in Novem­ber by the Hugh Green Foun­da­tion, in­tended to boost brain re­search, rep­re­sents the univer­sity’s ( and pos­si­bly the en­tire

New Zealand ter­tiary sec­tor’s) largesteve­r do­na­tion.

These foun­da­tions chan­nelled $ 31.5m back into univer­sity oper­a­tions in 2019 from a $ 257m as­set base. Their fi­nan­cial as­set port­fo­lio — mostly listed eq­ui­ties, but with nearly $ 30m in in­vest­ment prop­er­ties and pri­vate eq­uity — ap­pears to have achieved the sec­tor’s best- equal re­turns of 21 per cent dur­ing the year. This high level of fundrais­ing, and fund man­age­ment, helped push the wider univer­sity to re­port a sur­plus of more than $ 90m last year.

3: Univer­sity of Otago

The coun­try’s old­est univer­sity, founded in 1869, has qui­etly built an as­set base and fund- rais­ing ma­chin­ery sec­ond only to its much larger ri­val in Auck­land. With $ 2.1b in net as­sets, its po­si­tion on this rank­ing is held back only by rel­a­tively mod­est ex­ec­u­tive salaries — key staff there make $ 300,000 — which are among the low­est in the sec­tor.

Otago’s age and medical school pro­vide both an at­trac­tive pool of po­ten­tial donors and tar­get for do­na­tions, with Graeme Hart hav­ing tipped in $ 10m in 2018 for a new den­tal fa­cil­ity in Auck­land.

The Otago Foun­da­tion, with net as­sets of $ 243m, is com­pa­ra­ble in size to pow­er­house Auck­land and con­trib­uted $ 10m in fund­ing for univer­sity oper­a­tions af­ter de­liv­er­ing im­pres­sive re­turns last year of 21 per cent.

4th- equal: Massey Univer­sity

An early pi­o­neer in dis­tance ed­u­ca­tion, Massey has needed to ac­cu­mu­late rel­a­tively less in prop­erty on a per- stu­dent ba­sis, but its ex­pan­sion into Al­bany in 1993 still sees it with $ 1.2b in real es­tate. The Massey Univer­sity Foun­da­tion Trust se­cured $ 5.8m in do­na­tions last year, but its $ 47.4m as­set base is still in a growth stage and de­spite re­turns of 16 per cent, only $ 2.8m was con­trib­uted back to the univer­sity proper.

4th- equal: Auck­land Univer­sity of Tech­nol­ogy

The new­est en­trant on this list and grad­u­at­ing to univer­sity sta­tus only in 2000, AUT’s cen­tral city lo­ca­tion gives it prop­erty as­sets worth nearly a bil­lion dol­lars. Its sec­ond place in stu­dent en­rol­ments con­trib­utes to its ex­ec­u­tives — paid an av­er­age of $ 326,263 — be­ing the third- high­est­paid in the coun­try.

The AUT Foun­da­tion is scrawny com­pared to its peers, with only $ 2m in net as­sets — largely held in short­term de­posits. Char­i­ties Ser­vice fil­ings in­di­cate that six fig­ures in an­nual do­na­tions are quickly trans­mit­ted to the univer­sity proper, rather than in­vested long- term to grow an en­dow­ment.

6th: Vic­to­ria Univer­sity of Welling­ton

The cap­i­tal city’s univer­sity was founded in 1897 and, de­spite en­treaties from its cur­rent man­age­ment, is still called Vic­to­ria. Vic­to­ria’s sprin­kling of cam­puses across Welling­ton are worth $ 950m — but its un­usual, al­beit mod­est, lev­els of debt make it the only univer­sity whose net as­sets are lower than its real es­tate hold­ings.

The Vic­to­ria Univer­sity of Welling­ton Foun­da­tion, with $ 67m in net as­sets, is the largest out­side of the big two in Otago and Auck­land, and last year pulled in $ 6m in do­na­tions. Its trustees — in­clud­ing Forsyth Barr manag­ing direc­tor Neil Paviour- Smith and for­mer Depart­ment of Prime Min­is­ter and Cabi­net chief Sir

Maarten Wev­ers — over­saw an in­vest­ment port­fo­lio dom­i­nated by in­ter­na­tional eq­ui­ties that de­liv­ered re­turns of 16 per cent last year.

7th: Lin­coln Univer­sity

The runt of the lit­ter, Lin­coln’s size — with less than one- tenth Auck­land’s stu­dent num­bers — sees it ranked last in terms of salaries paid to key staff ( key ex­ec­u­tives there make only 60 per cent as much as their crossprovi­nce coun­ter­parts at Can­ter­bury), but on a per- stu­dent ba­sis net as­sets of $ 245m place it mid- pack.

As­set hold­ings re­flect Lin­coln’s sta­tus as an agri­cul­tural col­lege: 9290 sheep and 1457 cat­tle val­ued at $ 3.6m; and the col­lapse of a joint ven­ture with AgRe­search in 2019 saw the univer­sity book $ 15.3m in losses.

The univer­sity has been slow to take ad­van­tage of char­i­ta­ble struc­tur­ing to fa­cil­i­tate do­na­tions, with its foun­da­tion set up only last Novem­ber and by March re­port­ing zero ac­tiv­ity. This lethargy in fundrais­ing i s also matched by what ap­pears to be sub- par cap­i­tal man­age­ment: its $ 84m in fi­nan­cial as­sets largely held in trust lan­guish in short­term de­posits and last year earned re­turns of only 2.93 per cent.

8th: Waikato Univer­sity

The baby boomer of the bunch, Waikato Univer­sity was founded in 1964 and ranks only above min­now Lin­coln in net as­sets and ex­ec­u­tive salaries. With 10,617 stu­dents, it ranks last in terms of net as­sets per capita.

Waikato’s 2019 an­nual re­port flags em­ploy­ment griev­ances that might cost it $ 435,000, and a Hu­man Rights Tri­bunal case that may raise li­a­bil­i­ties of $ 350,000.

Out­side of Lin­coln’s still- ges­tat­ing foun­da­tion, and AUT’s re­volv­ing door, Waikato’s char­i­ta­ble arm is the small­est in the sec­tor with $ 1m in do­na­tions, leav­ing net as­sets at just un­der $ 10m.

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 ??  ?? Waikato ( Tau­ranga cam­pus, top left) is a rel­a­tive new­comer to the fundrais­ing game com­pared with Auck­land ( above), and Can­ter­bury ( right), while Lin­coln ( left) only set up a foun­da­tion to fa­cil­i­tate do­na­tions last year.
Waikato ( Tau­ranga cam­pus, top left) is a rel­a­tive new­comer to the fundrais­ing game com­pared with Auck­land ( above), and Can­ter­bury ( right), while Lin­coln ( left) only set up a foun­da­tion to fa­cil­i­tate do­na­tions last year.

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