Rangatira Annual Report 2023 - Flipbook - Page 14
14
R anga tira Annua l Rep or t 2 0 2 3
Venture Capital
Now that we have a fully staffed and stable executive team,
The venture capital (VC) sector has witnessed a notable slow
staff. The scheme allows participating staff to earn a long-
down over the previous year, and we have seen limited valuation
term incentive based on delivering total shareholder return
growth across the portfolio and fewer investments made.
hurdles over a three-year period. It serves to align staff with
Because our fund commitments have been spread across time,
the growth in shareholder value, improve staff retention and
we are not too exposed to any one point in the cycle.
make Rangatira a more attractive employer in an industry where
we have elected to implement a long-term incentive plan for
incentive schemes like this are now very much the norm.
Given our most recent commitments are yet to deploy most
of their committed funds, they should in fact be well suited to
The scheme will issue Rangatira shares to participating staff
invest in good value opportunities over the coming years. Since
should three-year hurdles be met. The first award would be in
our first venture capital investment in 2011, the portfolio has
March 2025 – that is three years from implementation, April
contributed returns of 18% per annum.
2022.
In addition to the attractive returns, from time to time we also
We propose to pay a final dividend of 46 cents per share (41
gain access to follow-on investment opportunities in portfolio
cents, FY22).
companies that outgrow a fund’s investment mandate. VC
makes up around 3.5 per cent of Rangatira’s portfolio. While
The total dividend paid during the financial year will be 67 cents
our target allocation is 5 per cent, we have been deliberately
or 4.1per cent of NAV. We expect the portfolio to be generating
selective over the last couple of years in adding further
a 4.3 per cent cash return in FY24 (4.0 per cent, FY23) so
managers to the portfolio – the primary consideration is
remain confident that we can maintain this level of dividend on
patiently choosing outstanding managers who we can look to
an increasing asset base.
build a long-term relationship with.
Unfortunately, the proposed dividend will not carry imputation
General
credits as our imputation credit balance is not sufficient to
You will see that we are proposing to amend the Constitution.
those non-charitable shareholders. We do, however, expect
Following last year’s AGM discussion, the Board has decided
this to change over time as underlying earnings increase from
that it is timely to update the Constitution to bring it in line with
portfolio businesses.
support imputing dividends. We understand that this will impact
modern convention. The proposed changes are covered in the
Notice of Meeting papers attached to this report. The Board
supports these changes and expects them to assist in clarifying
some points raised through the capital raise process and help
manage Board succession over time.
Finally, we offer our thanks to our Board, Shareholders,
Rangatira staff and the staff of all the businesses we are
invested in for their continued support over the last twelve
months.
This year the Board has undertaken a self-assessment and
succession planning exercise. Through this, the Board has
developed a longer-term succession plan for all board roles and
Kind Regards,
committees. This is likely to see the retirement of Keith Gibson
and Richard Wilks over the next two years and we will look to
refresh the board progressively while maintaining experience
and corporate memory.
David Pilkington
Mark Dossor