Harvard has expanded its dairy holdings in New Zealand after the country’s Overseas Investment Office (OIO) granted approval for the purchase of 143 acres bordering one of the university’s existing dairy properties for $1.3 million.
Harvard intends to buy the land freehold to use in support of its dairying activities and also to create a water shortage reservoir.
Harvard Management Company (HMC), the manager of Harvard’s $36.9 billion endowment fund, was given approval to acquire the land that abuts Big Sky Dairy Farm – a farm the fund acquired six years ago for $28 million. Known as the largest dairy farm in the country running 6,000 head on 1,600 hectares, The Big Sky dairy syndicate was created by now-deceased businessman Howard Paterson in 2001. However, the operation entered liquidation in 2009 after defaulting on payments to Nissan Finance NZ in 2007.
Following the 2010 purchase of Big Sky, Harvest went on to buy an additional 1,300 hectare dairy farm in Maniototo near two dairies it already owned in 2013.
Stir Up at Harvard
This addition to Harvard’s investment portfolio comes after a recent team shakeup at the endowment.
Like many investment vehicles, Harvard’s $36.9 billion endowment fund and its manager, Harvard Management Company (HMC), took a hard hit during and after the financial crisis of 2008, losing 22 percent within four months, according to the New York Times.
In response, the fund sought to increase the diversity of its holdings into alternative investments not highly correlated to general markets. And under the leadership of former Head of Alternative Assets, Andrew Wiltshire, Harvard has done just that. As of 2014, Farmland Investor Center reports that Harvard’s portfolio has agricultural and timber holdings throughout the U.S., New Zealand, Romania, Latvia, Argentina, Brazil, Chile, Ecuador, and Panama.
Since overseeing the endowment through this difficult time, Wiltshire has since retired from HMC, but has gone on to partner with former Harvard Management Co. colleagues, Oliver Grantham and Alvaro Aguirre to co-found Folium Capital – a new Boston-based investment firm looking to raise $500 million to commit to agriculture and timber investments.
Earlier in the year, it was also announced that Satu Parikh and Marco Barrozo, both former senior managers with the endowment left to launch HSQ Capital, a hedge fund geared to leverage commodity pricing inefficiencies and fixed-income markets. Other funds that were created by former Harvard Management Co. executives include Adage Capital Management, Highfields Capital Management, and Convexity Capital Management.
More recently, the fund also announced in August of this year that it was appointing Colin Butterfield as its new head of natural resources.
Butterfield has been chosen to lead the fund’s $3.6 billion natural resources portfolio, replacing Alvaro Aguirre-Simunovic who resigned from the position in October 2015 after 12 years with the company. Beginning in October of this year, Butterfield will report to managing director and head of public markets, Mr. Rene Canezin, who has been acting as the interim head of natural resources during the search for a replacement.
Butterfield joins Harvard from his position as CEO of Radar S.A., a Brazil-based $2.2 billion farmland investment management joint venture created by TIAA and Cosan S.A. While with Radar, he expanded the firm’s portfolio and improved its risk profile and increased profitability, while also serving as a member of TIAA’s Global Agriculture Fund investment committee.
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Lynda Kiernan