Ka Wai Ola - Office of Hawaiian Affairs, Volume 9, Number 10, 1 October 1992 — Page 10 Advertisements Column 1 [ADVERTISEMENT]

LEGACY

0 ur lnvestment Philosophy Explained Too often, Kamehameha Schools/Bernice Pauahi Bishop Estate is criticized for its approach to business. The purpose of this eolumn is to explain our business philosophy. Many of our critics forget the single reason for our existence is to carry out the Will of Bernice Pauahi Bishop. They forget that her Will is meaningless unless KS/BE moves forward with enduring financial strength. Mueh of that strength comes from our ever-evolving investment philosophy. You may be surprised to leam that 20 years ago, KS/BE regularly ran at an operating deficit. ln other words, we spent more money to operate Kamehameha Schools than the ineome we took in eaeh year. Today, thanks to the increasing value ot Estate lands and increasing revenues from the asset base, those deficits are a thing of the past. Nearly 80% of our core assets remain here in Hawai'i in land and investments. As part of our holdings, KS/BE owns and operates Royal Hawaiian Shopping Center, Windward Mall, Keauhou Shopping Village, Waiakamilo Business Center and Kawaiaha'o Plaza. Commercial and industrial properties in Waikiki, Kaka'ako, Kapālama, Pearl City and elsewhere are also valuable assets for the institution. In addition, KS/BE recently held substantial interests in two of Hawai'i's major financial institutions, and we will continue to look for non-real estate opportunities here. Hawai'i real estate remains the core of our asset portfolio, but we will also eontinue to diversify our investments in kind and plaee. Our long-term investment in Goldman Sachs was a significant redeployment of our portfolio into hnaneial assets. This immediately diversified our interests into investment banking, equities, fixed ineome, commodities and asset management. We own half an interest in over 300,000 acres of timberland in upper Michigan, apartments in Las Vegas, shopping centers in Wisconsin and office buildings in Atlanta and New York City. We also have investment partners like the Simon Group, J.P. Morgan, Harvard and Yale, and enjoy close working relationships with Duke University and the MacArthur Foundation. Recently, we made a small investment in a bank in China whieh we hope will open other linaneial opportunities in the Asian market and across the Pacific Basin. The ultimate goal of our activities is the financial heakh of KS/BE. We will continue to work actively and pmdently to advance our financial position and the growth of our assets. It is the only sure way to fulfill the legacy of Ke Ali'i Bernice Pauahi Bishop in perpetuity. Kamehameha Schools/Bernice Pauahi Bishop Estate KS/BE sponsors this eolumn in the interest of helping people understand its role and mission.