Rangatira Investments Annual Report 2021 - Report - Page 11
Ra n g a t i ra An n u a l Re p ort 2021
Rainbow’s End had a stronger year than we had anticipated. With 95 per cent of customers being domestic visitors, Rainbow’s End
has not felt the same impact from border closures as Polynesian Spa. In fact, when able to open, Rainbow’s End has benefited from
strong consumer spending and support. Nonetheless, the required closure of the park during the April nationwide lockdown and the
subsequent Auckland region lockdowns did dampen the result.
With a strong management team, further capital programs underway and significant maintenance work completed through lockdown
the business is well positioned for improved profitability in FY22.
We are invested into two SunGold kiwifruit orchard developments in Waiuku (near Auckland) and Bay of Plenty that will begin
producing in 2022 and 2023, respectively. The two developments are operated by an expert kiwifruit grower who is invested alongside
us and other investors.
Kiwifruit pricing has performed well over the last few years and both developments are progressing well. We have now secured all
the required Sun Gold licences to complete the development. Together with kiwifruit prices, we have also seen strong appreciation in
kiwifruit land values which bodes well for the investment.
During the year we completed the re-capitalisation of the business. This involved buying out the international 50 per cent shareholder
and injecting capital to reduce debt levels. This increased our stake to 20 per cent (from 9 per cent), alongside two other private
investors and ACC. The three farms are now operating well with a good lower cost management structure.
We have progressed the development of 1,800 hectares of forestry on one of the properties – this development will take 2-3 years to
complete, improving the returns on the three blocks and providing exposure to carbon and forestry markets.
We have now been invested in venture capital for 10 years and are pleased with the track record to date. Having committed to
eight funds across four managers over that time, our aggregate return (IRR) is 21 per cent. We are highly selective in these types
of investments given the risk and illiquidity, looking for outstanding managers with strong track records and credible proprietary
advantages. We made two additional investments in FY21, both to managers we already invest with:
Movac Fund 5 – we committed to Movac’s fifth fund, having already invested in Movac Fund 3 which had successful investments
into PowerbyProxi (sold to Apple) and Aroa Biosurgery (listed on the ASX). Movac are based in Wellington.
Icon Ventures VII – we committed to Icon Ventures’ seventh fund, being already invested in their fifth and sixth funds. Their fifth
fund had successful investments into Teladoc (listed on the NYSE) and MoPub (sold to Twitter), and their sixth fund is nearly fully
invested. Icon Ventures are based in Palo Alto, California.
We also increased our existing commitment to Pacific Channel Fund II alongside Elevate’s (the Government’s venture fund) $20m
commitment last year.