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HMC Sells $74 Million of Cows and Farmland to New Zealand Company

Harvard Management Company is housed in the Boston Federal Reserve Building.
Harvard Management Company is housed in the Boston Federal Reserve Building. By Karina G. Gonzalez-Espinoza
By Eli W. Burnes and William L. Wang, Crimson Staff Writers

Harvard’s more than 5,000 cows are about to change hands.

Harvard Management Company—the investment management team that oversees Harvard’s endowment—is selling the University’s dairy farms in the Otago region of New Zealand for $74 million, according to the New Zealand Herald.

Pending approval by New Zealand’s Overseas Investment Office, the deal will move roughly 5,500 cows and 8,500 acres of farmland to Dairy Otago Holdings Ltd, a New Zealand company partially owned by a Singapore-based investor. The application was filed in August 2017, according to investment office communications officer Joanna Carr, and will likely be reviewed by next June.

Harvard spent years amassing the New Zealand farmland, with much of the land acquired when Harvard purchased Big Sky Dairy Farm in 2010 for about $20 million. Andrew G. Wiltshire, a New Zealander who formerly worked for the New Zealand forest service, oversaw the purchase when he was managing director and head of alternative assets at HMC.

The latest deal follows speculation in June 2017 that the private equity firm KKR was planning to purchase Harvard’s bovine investments amid poor returns on Harvard’s natural resource assets.

In fiscal year 2016, natural resources comprised 10 percent of the University’s $35.7 billion endowment but returned negative 10.2 percent, meaning it ranked among the lowest-performing asset classes owned by the University. In the 2017 financial report, HMC CEO N.P. “Narv” Narvekar wrote the natural resource assets will continue to be internally managed but “will take multiple years to reposition.”

David L. Yermack ’85, former Managing Editor of The Crimson and chair of the finance department at New York University Stern, said he thinks Harvard’s investment in exotic assets, like New Zealand dairy farms, is unconventional and a poor strategy.

“I think Harvard has been overconfident in its ability to manage an exotic investment portfolio,” Yermack said. “And I think a lot of this has boomeranged back to hurt them.”

According to Yermack, most endowments invest in natural resources indirectly through a combination of stocks and bonds. Yermack said he thinks Harvard’s endowment, too, could perform better with a simpler combination of stocks and bonds.

“Simple is better. Diversification is the rule,” Yermack said. “It’s funny how we teach these things in first year finance to freshman college students, but at the highest level these lessons often get forgotten by the genius managers.”

Carr wrote that the timeline for approval by the New Zealand’s Overseas Investment Office depends on factors like the “complexity of the application, the need for further information and the time it takes for applicants to respond to these requests.”

A spokesperson from Harvard Management Company declined to comment.

—Staff writer Eli W. Burnes can be reached at

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