Booster Investment Scheme 2's Private Land and Property Fund swung back to profit with NZD 1.3 million after tax for the year ended March 2026, despite net asset value slipping due to unit redemptions. The Fund’s investment portfolio remains concentrated in unlisted New Zealand agricultural and property assets, while its Manager faces unrelated FMA proceedings.
- Profit after tax of NZD 1.314 million reverses prior year loss
- Total revenue rose to NZD 5.495 million driven by distributions and other income
- Net assets attributable to unitholders declined to NZD 209.8 million amid net unit redemptions
- Investment entirely in Private Land and Property Portfolio of unlisted NZ assets
- FMA legal action against Manager unlikely to materially impact this Fund
Return to Profit on Back of Higher Distributions
Booster Investment Scheme 2's Private Land and Property Fund (NZX:PLP) posted a profit after tax of NZD 1.314 million for the year ended 31 March 2026, a marked turnaround from a loss of NZD 1.688 million in the prior year. The improvement was underpinned by a 157% jump in total revenue to NZD 5.495 million, largely due to increased distribution income from its underlying portfolio and higher other revenue streams.
Operating expenses and management fees rose modestly but were well contained relative to revenue growth, resulting in a positive pre-tax profit of NZD 3.072 million compared to a near breakeven position the year before.
Net Assets Slip as Redemptions Outpace Issuances
Despite the return to profitability, the Fund’s net assets attributable to unitholders declined to NZD 209.8 million from NZD 218.1 million a year earlier. This contraction reflects net unit redemptions exceeding new unit issuances by NZD 9.7 million over the period, indicating modest outflows from investors.
Net tangible assets per unit held steady at NZD 1.29, close to the prior year’s NZD 1.31, suggesting stable underlying asset values on a per-unit basis.
Portfolio Concentrated in Unlisted New Zealand Property Assets
The Fund invests exclusively in the Private Land and Property Portfolio (PLPP), a related managed investment scheme focused on unlisted agricultural and horticultural land and property assets across New Zealand. The portfolio’s net assets stood at NZD 200.5 million at year-end, with a diversified mix of land, buildings, biological assets, and equipment.
Valuation of these unlisted property assets is inherently subjective and relies on external professional valuers and management assessments. The auditor flagged this as a key audit matter, confirming the Fund’s fair value measurement approach complies with NZ IFRS standards and involves rigorous external valuation processes and internal specialist review.
Risk Profile and Liquidity Management
The Fund faces typical risks for unlisted property investments, including market price fluctuations, credit risk, and liquidity constraints. Manager Booster Investment Management Limited (BIML) employs several mitigation strategies such as maintaining cash reserves, access to borrowing facilities, and withdrawal fees to moderate redemption demand.
While liquidity risk remains inherent due to the nature of the underlying assets, the Manager expects to meet ordinary withdrawal requests within 10 days, though full asset realisation could take over six months if required.
FMA Proceedings Against Manager Remain a Cloud
The Financial Markets Authority (FMA) has filed civil proceedings against BIML and several executives relating to investments outside the Private Land and Property Fund, specifically involving the Booster Tahi Limited Partnership and the Booster Wine Group. The claims allege breaches of fiduciary duties and related party transaction rules.
Booster is defending the claims, and any penalties or damages would be borne by BIML directly, not the Fund. The Fund’s investment portfolio does have commercial dealings with the Booster Wine Group, but management does not anticipate material impact on the Fund from these proceedings. The court case is expected to commence in February 2027.
Auditor’s Unqualified Opinion Confirms Financial Statement Integrity
Ernst & Young issued an unqualified audit opinion on the Fund’s financial statements, highlighting the valuation of the Private Land and Property Portfolio as a key audit focus area. The audit confirmed that the financial statements fairly present the Fund’s financial position and performance in accordance with applicable New Zealand accounting standards.
The audit report also noted the Fund’s compliance with risk management policies and the appropriateness of disclosures related to financial instrument risks.
Bottom Line?
While the Private Land and Property Fund shows signs of stabilising with a return to profit and steady asset values, the ongoing FMA legal proceedings against its Manager inject a layer of uncertainty that investors will want to monitor closely.
Questions in the middle?
- How might the FMA proceedings against Booster Investment Management Limited influence investor confidence and future fund flows?
- What impact could changes in New Zealand’s agricultural and property markets have on the valuation of the underlying portfolio?
- Will net unit redemptions continue to pressure the Fund’s net asset base, or is this a temporary adjustment?