NZ Superannuation Fund’s forestry talks with Harvard endowment fall through

Major investment institutions fail to reach agreement

A planned forestry deal between the NZ$20.08bn (€12.6bn) New Zealand Superannuation Fund and the Harvard University endowment has fallen through.

NZ Super had said in May that it was in talks to take full ownership of the Kaingaroa estate, with its fund manager GMO Renewable Resources, from 60%-owner the Harvard Management Co.

But the deal involving the 178,000-hectare estate on the North Island of New Zealand didn’t occur.

“Ultimately, the parties were unable to reach agreement and discussions on the matter have not progressed,” NZ Super says in its new annual report.
The fund’s existing 40% stake in the forest is already its largest single investment – which it originally bought from Harvard in 2006.
The fund says it has also been one of most consistently strong performing assets – the average return of the NZ$954m investment has been 18% p.a. since 2006.
Kaingaroa is managed by Timberlands Ltd. and is registered under the Forest Stewardship Council certification standard.

The fund, a signatory to the UN Principles for Responsible Investment, is New Zealand’s largest poolof investment capital and environmental, social and governance (ESG) factors are integrated in its investment due diligence, including climate change risks where relevant.
In June NZ Super made an A$40m co-investment with Global Forest Partners to buy into Australian Eucalyptus plantation assets being liquidated by Elders Forestry. The fund also bought six additional dairy farms, bringing the total to 10 – taking the value of its domestic rural investments to around NZD$110m.

Elsewhere in the report, NZ Super says it has begun integrating its responsible investment reviews of asset manager performance into the overall annual manager review process. “Notably,” it says, “one-third of our managers are now members of the UN Principles for Responsible Investment (PRI), up from 11% in 2010/11.”

During the period, the fund’s Responsible Investment team moved into the Investments team in order to further integrate RI into its investment activities. The team was formerly situated within Corporate Strategy.

It has hired Det Norske Veritas to help it and its emerging markets managers in controlling health and safety, environmental and other social risks. Link