Harvard’s natural resources gained 19% in 2011

Harvard University is attempting to increase the returns on investments for its US$32-billion endowment by directly investing in natural resources, such as timber holdings in Brazil, reported Bloomberg Businessweek on 20 September.

In the past decade, the Cambridge, Massachusetts-based university’s natural resources investments have been up by an annual average of 13%, gaining by 19% in 2011, according to its annual reports. Harvard’s is a top performer among endowments, with a 20-year return of 12.9% through 2011.

After Harvard’s investment arm, Boston-based Harvard Management Co., began in 1997 to buy up some of the timberland in Oregon, Washington and Pennsylvania that US paper companies were selling for years, it turned to overseas, Bloomberg reported.

In 2004, Harvard bought cutting rights to New Zealand’s Kaingaroa pine plantations. In 2005, it began buying forests in Romania and, according to Bloomberg, now owns most of a company that is one of the largest holders of Romania timberland, with 35,000 ha valued at US$100 million.

Since July 2008, when Jane Mendillo was named CEO of Harvard Management, Harvard’s holdings in forests, farms and other natural resources in Brazil, New Zealand and Romania have increased to a value of more than US$3 billion, about 10% of the portfolio, Bloomberg noted.

Source: Bloomberg Businessweek

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