Global and New Zealand Timber and Farm Land

As a long-term investor with a known liquidity profile, the Fund is in a good position to look through short-term volatility and invest where others cannot. In our view, both the timber and rural land sectors align well with our endowments and continue to exhibit very strong long-term potential. They are also good diversifiers for the Fund, with low correlation to both bond and equity markets.


The Fund’s timber portfolio has delivered strong returns since inception. In New Zealand, the Fund owns a 42% stake in Kaingaroa Timberlands, the owner of the Kaingaroa forest plantation. Located in the central North Island between Taupo and Rotorua, Kaingaroa covers around 180,000 hectares of planted forest, the bulk of which is radiata pine, with a small quantity of douglas fir and other species. Our investment in Kaingaroa Timberlands continued to perform well this year, both in terms of cash returns and valuation uplift.

Outside New Zealand, the Fund holds timber investments in a diverse range of geographies, including Australia, Brazil, Uruguay, Chile, Guatemala and Cambodia, via its investments in two funds, Global Timber Investors 8 and 9. The funds are managed by Global Forest Partners LP (GFP), a specialist timber investor based in New Hampshire. The Fund has also partnered with GFP as a co-investor, including the purchase of a share of some Eucalyptus plantation assets in Western Australia.

The Fund also holds a small interest in a forest estate in the USA managed by Hancock Timber Investment Group. These investments expand the Fund’s timber investments beyond New Zealand, helping to diversify our exposure by geography and species.


In 2010, the Fund began to invest in rural land. We see rural land as providing additional diversifying benefits to the Fund. We believe we will be able to add value, over the long term, through increases in productivity and application of additional capital. As at 30 June, the Fund owns 22 dairy farms located across New Zealand: in Southland, Waikato, Otago and Canterbury. We settled on a group of seven farms in Southland and one farm in Canterbury over the 2016/17 year.

As a long-term, responsible investor, we take an active governance role and require our farm manager, FarmRight, to adopt high standards. FarmRight works to ensure health and safety, animal welfare and environmental systems meet and exceed minimum legal requirements and minimise as much as possible some of the inherent risks involved in farming.

After successfully negotiating several difficult years of a structural low in the commodity cycle, the rural portfolio performed strongly in the 2016/17 financial year. We continue to seek further investment opportunities in other rural sectors, both locally and offshore. See our Palm Oil Case Study for information on the cessation of palm kernel extract use on our farms.

Download the case study (PDF 574KB)