NZ Super fund eyes Kaingaroa purchase

New Zealanders could end up part-owning harvesting rights to the entire Kaingaroa Forest if a deal to purchase the majority stake in the forest goes ahead.

The New Zealand Superannuation Fund has confirmed that it and global investment firm GMO Renewable Resources were in discussions with Harvard Management Company regarding the possible purchase of Harvard's majority stake in the Kaingaroa Forest estate.

The Harvard Management Company is a United States-based investment management corporation and is a wholly owned subsidiary of Harvard University. The company manages the university's endowment, pension assets, working capital and non-cash gifts.

GMO Renewable Resources is a global investment management firm with a client base that includes endowments, pension funds, public funds, foundations and cultural institutions.

Both companies have extensive investment portfolios worth more than $90 billion each.

Harvard currently holds a 60 per cent stake in Kaingaroa, an estate of approximately 170,000ha of harvesting rights to the plantation forest.

The New Zealand Superannuation Fund already owns a 40 per cent stake in Kaingaroa.

The fund is designed to smooth the tax burden of the rising cost of New Zealand Superannuation by investing money today to pay for superannuation entitlements in the future.

It is New Zealand's largest pool of investment capital - worth $19.4 billion as at March 31. The fund invests in public and private investment markets throughout the world and has assets valued at more than $4 billion in New Zealand.

As well as Kaingaroa Forest the fund has major stakes in Z Energy and Auckland International Airport.

New Zealand Superannuation Fund communications manager Catherine Etheredge said forestry management would continue on a business-as-usual basis by Timberlands and until discussions were concluded the parties would not be making any further comments.

However, forestry contractors were right behind the purchase proposal. Forest Industry Contractors Association chief executive, Rotorua's John Stulen, said it was great news.

"Having a New Zealand-owned asset for the jewel in New Zealand forestry's crown is a step in the right direction for promoting the clean, green brand of NZWood," he said. "For years we have seen too many benefits going to disparate overseas-owned companies and as a result forestry marketing has suffered from fragmentation.

"Past sales of New Zealand forests have resulted in turmoil for local contractors as each time a sale takes place the new buyers have often put all service providers through the ringer to extract lower prices for doing the same job as always."

Mr Stulen said local operators had the experience and local knowledge to be the most efficient at forest management and harvesting work.