Super Fund adds more timber assets to portfolio

State-funded investor the New Zealand Superannuation Fund (NZSF) announced today it had added three more timber investments to its portfolio.

The purchases, for an undisclosed sum, included one local and two United States-based forests, and took the total value of the fund's timber assets to $300 million.

Under the latest deal, NZSF has bought management rights to the Tahorakuri property near Wairakei in the central North Island. This property is 14,500 acres of mature radiata pine.

It has also purchased a timberland investment in Washington State in the northwest US , comprising 7300ha of hemlock and douglas fir.

The third investment was located in Texas in the US south, comprising of about 18,220ha acres of loblolly pine.

All three properties will be managed by the Hancock Timber Resource Group (HTRG).

The assets are part of about 376,547ha of timberland or timber rights recently acquired by HTRG from Harvard Management Company, the investment manager for Harvard University.

In March NZSF announced it was planning to allocate up to 5 per cent of its assets to timber by June 2007. The latest purchase takes that tally to 4 per cent.

Last month NZSF made its first foray into timber, buying half of the former Evergreen Forests from the fund which beat it in an outright bid for listed Evergreen in September.

"(NZSF) is committed to holding a widely diversified portfolio of assets," chief executive Paul Costello said.

"As a long-term investor, with no requirement for regular cash flows from investments, timber is an attractive asset class for the fund."

The NZSF, established by the Government in September 2003, is intended to partially provide for the future cost of superannuation, which is expected to double in the next 50 years.

The Government planned to allocate an average of $2.2 billion a year to the fund over the next 20 years, with the fund expected to grow to about $100 billion by 2020.

The value of NZSF as at September 30 was $7.6 billion.

- NZPA