NZ Super Fund looks to offload forests

The New Zealand Superannuation Fund is reported to be in talks to sell a group of North Island forests, though negotiations to buy out Harvard University's endowment fund stake in the Central North Island Kaingaroa forest have stalled.

The Cullen Fund, so-called for its architect former Finance Minister Michael Cullen, had 11 forest estates valued at some NZ$91.1 million available for sale as at 30 June, according to its annual report. The fund sought offers for land, forest crop and carbon credits in April and received bids in May, it said.

"As at 30 June, 2012, due diligence was being conducted by a selection of parties invited to do so at the discretion of the group," the report said. "If an acceptable agreement is achieved, it is anticipated that settlement will occur at some yet-to-be-determined date and will be dependent upon any regulatory approvals that may be required."

Timber investments made up 6.9 per cent of the fund's NZ$19.67 billion of assets as at August 31, the bulk of which comes from its 40 per cent share of the Kaingaroa forest estate. The NZ Super Fund said discussions with Harvard's endowment fund to take full control of the Kaingaroa investment in a deal involving GMO Renewable Resources haven't progressed after the parties failed to reach agreement.

Kaingaroa has consistently been one of the Cullen Fund's best-performing assets, making an average annual return of 18 per cent. The investment was valued at some NZ$954 million as at June 30. At this time the NZ Super Fund is not considering a sale of any of its interest in Kaingaroa Forest. The fund topped NZ$20 billion in assets under management in September, having started in 2003.

Source: Scoop

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