NZ Super buys into Kaingaroa forest

The New Zealand Superannuation Fund has agreed to buy an interest in the Kaingaroa Forest estate from the Harvard Management Company (Harvard) for about $300 million.

Harvard, a large pension fund for the famous Ivy League university, will retain majority ownership. It bought the forest estate from receivers of the Central North Island Forest Partnership three years ago for around $1 billion.

Property management will continue to be undertaken by Timberlands Limited, based in Rotorua.

Kaingaroa is an estate of approximately 170,000 hectares of cutting rights to plantation forest located in the Central North Island. The bulk of the timber is Radiata Pine, with a small quantity of Douglas Fir.

The combination of high rates of growth, flat topography, plus close proximity to numerous timber mills and Port of Tauranga, made Kaingaroa one of the premier timber estates in the world, said David May, chairman of the fund's board of guardians.

He said the fund, known as the Cullen Fund, was continuing to diversify its mix of assets, which now amounted to over $10.5b.

"As a long-term investor, timber is an attractive asset class for the fund," he said.

Timber is one of a number of private market assets owned by the fund. In 2005, it made a number of timber investments in both New Zealand and the United States. These currently have a combined value of $340m.

- NZPA