New Zealand Super sells forestry stake

The country’s largest superannuation fund has sold a 2.5 percent stake in Kaingaroa Timberlands.

New Zealand Superannuation Fund has sold a 2.5 percent stake in New Zealand’s largest forestry business, Kaingaroa Timberlands, to six iwi, Maori tribal organisations.

The deal, signed on February 29, 2014, reduces NZ Super’s stake in Kaingaroa to 38.75 percent. It still remains the largest shareholder; the other shareholders are Canada’s Public Sector Pension Investment Board with 30 percent and an affiliate of the President and Fellows of Harvard College with 28.75 percent. Pricing details were not disclosed.

The Kaingaroa Timberlands is a large, mature forestry operation in the North Island that will offer immediate cash returns to the iwi, according to Vanessa Eparaima, the chairperson of Raukawa, one of the iwi involved in the deal.

The other iwis are Ngati Rangitihi, Ngati Whakaue Assets, Te Arawa River Iwi Limited Partnership, NgatiWhare, Te Arawa Group Holdings Limited and Tuwharetoa. They have joined to form Kakano Investment Limited Partnership, the body that bought the stake. Eparaima has been appointed chair of Kakano.

The deal brings together investors with similar objectives and long-term investment goals, according to Adrian Orr, chief executive of the NZ Super Fund.

“The involvement of Kakano is consistent with the NZ Super Fund’s strategy [for co-investment],” he said in a statement. “Iwi are natural investment partners for the NZ Super Fund and our hope is that this deal opens up further domestic co-investment opportunities with iwi and iwi collectives.”

Kaingaroa Timberlands covers 190,000 hectares of land and 90 percent of it was land returned to eight central North Island iwi by the state in 2008. The area is widely believed to be one of the best softwood plantations in the world, according to NZ Super. It is located close to the Port of Tauranga.

Kaingaroa is managed by the Rotorua-based firm Timberlands Limited, in accordance with Forest Stewardship Council standards.