The NZ$19.46bn (€12bn) New Zealand Superannuation Fund is in talks to take full ownership of the Kaingaroa forest estate on the North Island of New Zealand.
The fund said that it and its fund manager GMO Renewable Resources were in discussions with the Harvard Management Co. over the “possible purchase” of the US university endowment’s 60% stake in the 170,000-hectare estate.
The fund’s existing 40% stake in the forest is already its largest single investment. At NZ$1.26bn, timber currently accounts for 6.5% of NZ Super’s total portfolio. “Until discussions are concluded the parties will not be making any further comment,” NZ Super said in a statement. During the negotiations, forestry operations will continue as usual by Timberlands Ltd.
The fund, a signatory to the UN Principles for Responsible Investment, is New Zealand’s largest pool of investment capital and environmental, social and governance (ESG) factors are integrated in its investment due diligence, including climate change risks where relevant. When appointing property, rural or forestrymanagers, climate change is incorporated into due diligence of the manager and mandate.
Alongside GMO, its timber managers are Global Forest Partners and Hancock Timber Resource Group.
Kaingaroa is one of the largest plantations in the southern hemisphere. It was first planted in the late 1920s and owned as a state asset by the New Zealand government, according to a Wikipedia entry.
The forest – along with the recently acquired Shell fuel distribution business rebranded as Z Energy – was one of the fund’s best performing investments in 2011.
The Guardians, the body which oversees the fund, have set up an internal climate change “think tank” to assess climate change risks and opportunities.
Harvard’s head of external management is a New Zealander, Andrew Wiltshire, who used to work with the NZ Forest Service and is a former partner at GMO Renewable Resources.
In March, Responsible Investor published a “call to action” to manage Harvard’s $32bn endowment in a responsible manner.