Having $17.7 million in its managed fund account shows how
well the Otago Regional Council has come through the recent
world financial crisis, chairman Stephen Woodhead says.
The finance and corporate committee was last week asked to
approve a review of its statement of investment policy and
objectives (Sipo) which outlines how the council's managed
fund is overseen by its fund manager, BNZ Private Bank.
The fund was one aspect of a wide-ranging investment
portfolio the council held which included its ownership of
It was set up in 2000 with an initial investment of $10
million as part of a strategy to diversify its investment. An
extra $5 million was added in 2004.
Council director of corporate services Wayne Scott said
interest and dividends from the funds were returned to
council each year and helped offset general rates.
The equity continued to ''ride the markets''. It was made up
of $10 million in cash and about $7 million in shares and
The updated Sipo, a requirement under the Local Government
Act, was based on a low-risk investment strategy and provided
a policy framework for the council to supervise and monitor
In general, the fund was expected to return 5.6% per annum.
Mr Woodhead said the Sipo looked comprehensive and reflected
the council's position as a public entity which should be
The returns from the past four to five years showed the
council had come through the financial ups and downs of
recent years ''pretty well''.
''A lot of investors lost their shirt since 2008 so this
comprehensive Sipo provides confidence.''
Mr Scott said there would be a report to the council at the
end of the financial quarter which would go through the
specifics of the council's investment performance.
Surplus funds held outside the managed fund were managed
through a ''multi-bank'' arrangement also managed by BNZ.
The Sipo would now be reviewed each year as part of the
council's treasury management policy.