DF1, the New Zealand dairy farmer owned by Harvard University's endowment fund, posted a profit of $4.87 million last year, having bought the Big Sky Dairy Farm properties in central Otago from receivers.

Harvard paid about $32 million for the Ainwick, Tercio and Saran farms on the Maniototo Plain, having gained Overseas Investment Office approval for the purchases in September 2010.

Big Sky was the biggest dairy farm operator in central Otago when it defaulted on payments in 2007 and was placed in liquidation in 2009.

DF1's accounts for the year ended June 30, 2011, show Harvard picked up assets worth almost $34 million in the deal. Revenue surged to $11.2 million in 2011 from about $1.6 million a year earlier, when it recorded a $1.2 million loss.


The Big Sky farms are being managed alongside DF1's existing dairy property, Helenslea.

Harvard's interests in New Zealand include a majority stake in the Kaingaroa forests.

The US$32 billion ($38 billion) endowment fund made an 18.8 per cent return on its natural resource portfolio in the year ended June 30, which included the cutting rights to Kaingaroa forests. The portfolio returned 21.4 per cent for the period.

Harvard's fund holds about 10 per cent of its assets in natural resources which it says is mostly timberland, and agricultural and other resource-bearing properties on five continents.

The natural resources portfolio has been built up during the past decade by Andy Wiltshire, a New Zealander who started his career with the New Zealand Forest Service, the developer of the Kaingaroa plantation forest in the central North Island. Wiltshire is head of external management for Harvard Management, the fund's manager.

Harvard beat China's Citic to buy the Kaingaroa cutting rights from receivership in 2004. The price was not disclosed but was believed to be near US$650 million. The same forest was sold by the Crown in 1996 for $2.2 billion.

Since then the New Zealand Superannuation Fund has acquired a minority interest in the Kaingaroa forest estate for about $300 million.