IBA’s Investment and Asset Management division promotes self-management and economic independence. It partners with Aboriginal and Torres Strait Islander organisations and businesses getting them involved in commercial enterprises and investment opportunities. The division aims to produce financial returns; create employment, training and supply chain opportunities; increase commercial capability; and build an intergenerational asset base.
Products and services provided through this division are:
- direct investment in businesses and assets, in partnership with IBA
- ability to co-invest in managed investment funds – the Indigenous Real Estate Investment Trust (I-REIT) and Indigenous Prosperity Funds (IPF).
They offer meaningful opportunities for:
- asset ownership
- stable and enduring income streams
- capacity development and other investment support
- employment and training
- supply chain contracts.
The tumultuous impact of COVID-19 on broader economic conditions and market volatility introduced unforeseen challenges.
For the Indigenous Prosperity Funds (IPF) (which provides eligible investors with the opportunity to invest in diversified portfolios including exposure to Australian and international shares, bonds, property and cash), exposure to global equity markets saw IPF performance drop, before recovering at the back of Q4. The IPF now holds more than $80.0 million in Indigenous co-investment across 36 investors.
IBA has seen success in its Indigenous Real Estate Investment Trust (I-REIT) this year. The I-REIT is an Australian unlisted unregistered wholesale unit trust which aims to generate risk-adjusted returns for co-investors from a combination of income and capital investments in a diversified portfolio of properties around Australia.
The I-REIT generated $11.4 million in new investments from 15 new and existing co-investors in late 2019.
COVID-19 introduced challenges to some direct investment assets. With restrictions forcing shutdowns, several tourism operations have faced significant challenges and uncertainty. IBA’s portfolio managers worked intensely and creatively to ensure that Indigenous communities and employees were safe and supported, and plans are underway for recovery when restrictions ease.
Other direct investments have delivered great successes for IBA and partners. We provided funding for a partnership between Aboriginal company Centre for Appropriate Technology (CfAT) and global communications company Viasat, to build two state-of-the-art satellite ground stations in Alice Springs. This commercial project is the first of its kind on Aboriginal land and provides economic returns, along with employment and skills training opportunities, with CfAT contracted for the facilities management of the site.
IBA partners with Julalikari Council Aboriginal Corporation (JCAC) in joint venture ownership of the Tennant Creek IGA, providing economic returns and employment and training opportunities for the Aboriginal community. In 2019, IBA acquired a 50% share in the Tennant Creek BP alongside JCAC, creating efficiencies across both businesses. The partnership now provides further strong economic returns and employment and training opportunities for Aboriginal people.
In 2019-20, IBA also moved to divest its interest in Carpentaria Shipping Services (CSS) to the existing partners Mawa Riinbi Pty Ltd and P&O Maritime Pty Ltd (P&O). The divestment will increase Indigenous ownership in the business to 40% with P&O holding the balance. The increased equity and distributions received by Mawa Riinbi will provide an increased income stream for Aboriginal people in the Borroloola region. This divestment supports IBA’s aim of partnering in joint ventures with Indigenous communities and investors and divesting when the time is right to enable the Indigenous partner to obtain maximum community benefit.
In Q4, the Investments and Asset Management division began to review its acquisition strategy with a focus on strong management and governance and the aim of repositioning the portfolio for future growth.