(May 1, 2013) – Harvard is building out one asset from its portfolio that-unlike the endowment as whole-performed well in the last fiscal year: dairy farm holdings in New Zealand.
The farm development in Central Otago is already one of the largest in the country, and gained 11% in value year-on-year as of last June, according to financial filings. Over the same period, the Harvard Management Company returned 2.4% on its natural resources portfolio (which includes agricultural assets), and -0.05% on the $30.7 billion endowment as a whole.
New Zealand’s Overseas Investment Office released its decision yesterday to approve Harvard’s acquisition of an additional 3,414 acres of freehold land and the development of a dairy farm on the site.
The office’s decision said that the university’s proposal “has satisfied” the “‘substantial and identifiable benefit to New Zealand’s criteria” required for such foreign investments. The project will, according to officials, create jobs, enhance productivity, and benefit the country’s “image, trade, or international relations.”
Harvard Management Company has long been a major investor in New Zealand’s land: In 2003, it purchased the Kaingaroa forest for about $650 million. The country’s sovereign wealth fund, along with the Public Sector Pension Investment Board of Montreal, have been buying stakes away from the endowment over the past several years.
Harvard has made solid returns on that deal, and seems eager to repeat its Antepodean success in the dairy industry.
According to the Otago Daily Times, as of June last year Harvard’s owned 6,641 cows in New Zealand.
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