Harvard University expands Otago dairy holdings

The multibillion-dollar Harvard University endowment fund has received Overseas Investment Office (OIO) permission to continue expanding its dairy farm holdings in the Maniototo in Central Otago, already among the largest in the country.

The OIO decision yesterday granted consent for Dairy Farms Partnership, owned by Harvard University in the US, to buy 1382ha of freehold land on Puketoi Runs Rd, in the Maniototo.

Before this purchase, Harvard's total assets in the district were valued at more than $60 million.

The full-year report of Harvard subsidiary DF1 Ltd, filed with the Companies Office on Christmas Eve, said DF1 had, subject to OIO approval, acquired the farm assets of Dogterom O'Callaghan Ltd for $2.5 million, including $1 million for stock and $1.23 million in Fonterra shares.

Despite booking a more than 50% decline in profit, Harvard is continuing to acquire land. Its herd of 6641 cows, as at June last year, is valued at almost $13 million.

The Puketoi Runs Rd property joins the farms Helenslea, Alnwick, Tercio and Saran in the district.

In its decision, the OIO said Harvard planned to upgrade the property to operate as a dairy and dairy support farm, which would create jobs in the area.

The former controversial Big Sky Farm development was bought out of receivership by the Harvard University endowment fund in late 2010 for $32 million.

As at June last year, the fund's total asset value had risen 11% to $60.4 million from $54.3 million the previous year.

During the previous financial year, DF1 acquired a 20% interest in the Maniototo East Side Irrigation Co Ltd, plus board representation through a related party. The financial report showed DF1's operating revenue declined 3.4% from $11.3 million the previous year to $10.98 million for the year to June. It appears rising farm expenses and administration costs contributed to a 55% decline in after-tax profit, from $4.33 million the previous year to $1.94 million.

DF1 Ltd was incorporated in the Cayman Islands and registered in New Zealand as a branch of an overseas company. The ''group'' financial results reported represent DF1 and its 99%-owned subsidiary Dairy Farms Partnership.

simon.hartley@odt.co.nz

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