The New Zealand Superannuation Fund confirmed that it and global investment firm GMO Renewable Resources were in discussions with Harvard Management Company over the possible purchase of Harvard’s majority stake in the Kaingaroa forest estate.
Harvard currently holds a 60 per cent stake in Kaingaroa, an estate of approximately 170,000 hectares of harvesting rights to plantation forest located in the Central North Island of New Zealand.
The Fund already owns a 40 per cent stake in Kaingaroa, which it bought in 2006. Forestry management will continue on a business-as-usual basis by Timberlands Limited.
Kaingaroa is the super fund’s biggest single investment, and part of its NZ$1.26 billion timber investments, which include international timber holdings.
The forest estate was singled out as one of the fund’s best performing investments in the 2011 financial year, generating taking almost NZ$3.5 million in its share of profits.
Andy Wiltshire, a New Zealander who started his career with the New Zealand Forest Service, has built up the natural resources portfolio of Harvard Management during the last decade. Wiltshire is head of external management for Harvard Management.
Harvard beat out China’s Citic to buy the Kaingaroa cutting rights from receivership in 2004. The price was not disclosed but it was believed to be near US$650 million. The Crown sold the Kaingaroa forest in 1996 for NZ$2.2 billion.
