Tuesday, October 27, 2020

"Harvard Spins Out Natural Resources Into New Investment Management Firm, Solum Partners"; Australia: "Harvard University to cash out of NSW almonds and cotton farms"

Not sure if these two stories are related. First up Global AgInvesting, October 8:

Harvard University’s $41.9 billion endowment is spinning off its natural resources portfolio and team to launch Solum Partners, an independent management firm focused on investment opportunities in the global agriculture and food industries. The company will target large-scale, efficient ag production assets that present potential for vertical integration into distribution and marketing channels. 

Anchoring the new Boston-based firm, Harvard Management Co. and insurer American International Group Inc. (AIG) will commit $200 million each – and are expected to also invest in assets being bought by the firm from Harvard.

“Sustainable farming practices are critical to the security of the global food chain,” said Doug Dachille, chief investment officer, AIG. “We are supportive of opportunities that advance those endeavors.” 

Heading up this new firm and its team of 25 professionals as CEO will be 47-year-old native of Brazil and former managing director and head of Natural Resources for HMC, Colin Butterfield. Butterfield joined HMC in 2016, replacing Alvaro Aguirre-Simunovic who resigned from the position in October 2015 after 12 years with the company. 

Prior to HMC, Butterfield was CEO of Radar S.A., a Brazil-based $2.2 billion farmland investment management joint venture created by TIAA and Cosan S.A. While with Radar, he expanded the firm’s portfolio and improved its risk profile and increased profitability, while also serving as a member of TIAA’s Global Agriculture Fund investment committee.

Between 2010 and 2013, Butterfield was president of Cosan Alimentos, and between 2007 and 2010, held the positions of COO and CIO at Bracor S.A. Previously, he was a director at Cargill where he structured merger and acquisitions and business development plans for entry into the Brazilian sugar and ethanol market for the group between 2004 and 2007.

“Food value chains need to evolve,” said Butterfield. “Farmers are facing an increasingly challenging operating environment and much more demanding consumers.”

“We believe we are in a strong position to help producers navigate this evolution – drawing on our deep agricultural and financial know-how and focus on operational excellence.”

Coinciding with the announcement of the launch of Solum Partners is the announcement that the firm has acquired, with the backing of HMC affiliates and AIG, select investment assets that had been managed by the team while at HMC, including avocado, olive oil, apple, blueberry, and soybean production assets, as well as stakes in Westfalia, a global avocado distribution company, and California Olive Ranch, a U.S.-based producer of extra virgin olive oil....


And from the Australian Financial Review via Farmlandgrab, October 11: 

The $56.5 billion Harvard University Endowment Fund is preparing to sell another chunk of its Australian almond and cotton holdings after putting the Western Rosella Farming portfolio in the NSW Riverina on the market.
The Lachlan Valley portfolio, which has an asking price of $120 million, covers about 13,652 hectares and is made up of three properties: 524-hectare Moora at Hillston, 2419-hectare Euroley at Euroley and 10,708-hectare Newmarket at Maude.
The portfolio offering follows the January sale of the Ivy League university’s two other Hillston cotton and almond farms – Wyadra and Cowl Cowl – to Boston-based Hancock Agricultural Investment Group for more than $120 million, as revealed by The Australian Financial Review.
While no reason has been given for the decision to divest its Australian investments, the university fund has been actively reducing its real estate holdings over the past two years.
It will also expect a strong exit price after ASX-listed Rural Funds Group struck a deal to sell its Mooral almond orchards near Hillston to Hancock for $98 million, at a massive premium to their book value.
The diversified portfolio includes permanent plantings, such as almond orchards; approved greenfield development land, both dryland and irrigated row cropping; and livestock grazing.
The endowment fund has $US40.9 billion ($56.5 billion) of assets under management and is the biggest single contributor to Harvard University’s annual operating budget.
In the 2019 financial year the endowment fund provided a distribution of $US1.9 billion – or 35 per cent of Harvard University’s operating budget of $US5.5 billion....
Recently on our friend the almond: