Harvard University has officially moved towards selling $700mn worth of timberland in Brazil, Uruguay, and Argentina. The university’s investment management subsidiary, Harvard Management Company began approaching investors to buy either minority or majority shares of the endowment.
This overhaul of the Ivy League school’s portfolio is being driven by Narv Narveker, the CEO of Harvard Management Company, who was hired from Columbia University in 2016. The official line is that the university is revamping the endowment’s natural resources strategy in an effort to reduce risk.
Admittedly, teak can be an investment that takes some time to reap the benefits, but you’d think a 381-year-old college would know how to play the long game.
Part of the issue comes from the fact that many of the companies that make up Harvard’s timber holdings consist of little (if any) slow-growth varieties, instead focusing on fast-growing, often invasive species such as eucalyptus and pine.
A switch to more sustainable forestry practices would be the most effective way to manage economic risk while also preserving the university’s dedication to the environment, but would undoubtedly require a more hands-on approach to managing the farms themselves.
While Harvard may be hesitant to move forward with timberland investment, there are plenty of investors willing to snap up this incredible opportunity.
Teak’s unique properties of incredible hardness, water-resistance due to high oil content, and a lack of splinters all contribute to the market’s near-constant want for this wood.
Even more importantly, consumers concerned with deforestation are demanding sustainable sources of teak lumber, making now the time to invest in companies partnered directly with responsible land owners focused on making a positive impact on their community.
Ultimately Harvard’s move away from timber holdings is what suits that organization’s portfolio at the time.
But for folks looking to grow their returns in the long term, it pays to keep in mind all the good that comes from teak wood.