Tamsyn Parker

Money Editor for NZ Herald

Super Fund sells slice of forest to iwi

The Super Fund has sold a 2.5 per cent stake in Kaingaroa Timberlands - New Zealand's largest forestry operation, to six central North Island iwi. Photo / NZ Herald
The Super Fund has sold a 2.5 per cent stake in Kaingaroa Timberlands - New Zealand's largest forestry operation, to six central North Island iwi. Photo / NZ Herald

The New Zealand Superannuation Fund has sold a 2.5 per cent stake in New Zealand's largest forestry business Kaingaroa Timberlands to six central North Island iwi.

The deal, which was done at an undisclosed price, will see the super fund reduce its stake in the business from 41.25 per cent to 38.75 per cent.

The six iwi which include Ngati Rangitihi, Ngati Whakaue Assets and Te Arawa River Iwi Limited Partnership, Ngati Whare, Raukawa, Te Arawa Group Holdings Limited and Tuwharetoa, have formed Kakano Investment Limited Partnership to buy the stake.

Read the full announcement here.

The other shareholders of the company are a Canadian Crown pension scheme called the Public Sector Pension Investment Board which owns 30 per cent, the Canadian forces and an affiliate of the President and Fellows of Harvard College which has a 28.75 per cent.

The land underneath the Kaingaroa Timberlands tree crop is 90 per cent owned by eight central North Island iwi - it was returned to the iwi in 2008 in the largest single Treaty settlement.

NZ Super Fund chief executive Adrian Orr said there was strategic benefit to the company in having the underlying landowners take a stake in the forestry business.

"The involvement of Kakano is also consistent with the NZ Super Fund's strategy to co-invest alongside partners with similar objectives and long time horizons. 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."

Kakano chairwoman Vanessa Eparaima, who is chairwoman of Raukawa said the investment was a major strategic and commercial step forward for iwi, and a win-win that ensured iwi were involved in the forestry business itself as well as being the land owner.

"This investment shows the value in working collaboratively with like-minded and appropriately structured and resourced iwi," Eparaima said.

"Individually we could not make this deal happen - collectively we have."

Eparaima said the size and maturity of the Kaingaroa Timberlands forestry operation meant immediate cash returns would be generated for Kakano from its investment - a key investment advantage for the collective.

Kaingaroa Timberlands is New Zealand's largest forestry operation, covering 190,000ha of land located east of the area between Lake Taupo in the south to the Rotorua Lakes in the north.

- NZ Herald

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