External investment professionals (Fund managers) will be appointed to manage most of the Rātā asset classes.

Rātā will internally manage the Community Loans and Local Venture Investments. Both internal and external managers will manage direct investment and cash.

Fund managers may use either passive or active management approaches. Where applicable, any manager and/or sector reviews will consider the role of passive management and the case for use of active management. The Investment Committee decides the approach on an asset class basis based on the beliefs above.

Where the markets are well established and researched, passive approaches are likely to achieve greater returns over the long term at a lower fee.  However, passive approaches follow markets, making implementation of our ESG and responsible investment approach more challenging.

Active management is likely to be used where there is a reasonable expectation that, in the aggregate, over the longer term, the active manager(s) will add value above the benchmark return after accounting for fees and risks taken, and to get better alignment with our purpose.

Manager Appointment

Rātā appoints fund managers based on their alignment and contribution to our investment objectives and beliefs. 

The process Rātā uses to appoint a fund manager is as follows:

• Independent advisor (Mercer) will provide a long list of potential fund managers.
• The CFO and Independent Advisor shortlist the managers based on the criteria below.
• With the support of the CFO and Independent Advisor, as required, the CE will interview and possibly visit the preferred fund manager before making a final appointment decision.
• The Investment Committee will ratify the decision.  The committee will verify that the process has been followed, the criteria have been met, and that there is no other information to consider.

The critical criteria for selecting and appointing fund managers are:

• Alignment to the Rātā purpose and fit to the portfolio, investment advisor rating, ESG credentials, return expectations, risk considerations, fees, and passive and active alternatives.