Harvard Management Company (HMC), which manages Harvard University’s $41.9 billion endowment, has spun off its natural resources team into an independent investment management firm called Solum Partners.
Colin Butterfield, head of Harvard’s natural resources team, will be the firm’s CEO, and will lead a team of more than 25 with experience in the food and agriculture and investment management industries.
Solum will focus on real assets in the agriculture and food production industry, and will invest in global agriculture and food opportunities, with the goal of targeting large-scale agricultural production assets with the potential for vertical integration in areas such as distribution and marketing.
“Our team sees an opportunity to generate attractive, risk-adjusted returns by helping agricultural producers who need a true partner,” Butterfield said in a statement.
The firm said its strategy is driven by a focus on “strong partnerships, operational excellence, and continuous improvement, and is underpinned by a comprehensive approach to ESG [environmental, social, and governance investing].”
HMC CEO Narv Narvekar said in a message to HMC affiliates last week that, under Butterfield’s leadership, the natural resources team “immediately developed a robust set of sustainable investing guidelines to ensure that those tasked with operating our investments act as responsible stewards of the environment,” according to The Harvard Crimson.
Narvekar also said Harvard will “continue to work closely” with Solum as investors and advisers on the management and sale of the university’s remaining natural resources assets.
The first action by Solum was to acquire certain investments that the team managed or made while at Harvard with the backing of affiliates of HMC and American International Group. The investments include avocado, olive oil, apple, blueberry, and soybean production assets, as well as stakes in avocado distribution company Westfalia and US extra virgin olive oil company California Olive Ranch.
Harvard’s natural resources assets have been among its worst performing asset classes in recent years, losing 12.4% in fiscal year 2019 and losing 2% in fiscal year 2018.
“We are obviously disappointed with persistent negative returns in this legacy part of our portfolio,” Narvekar said in last year’s message from the CEO. “Furthermore, we are pleased to have completely rebuilt an impressive team to manage this portfolio.”
According to a company spokesperson, the name Solum comes from a Latin term used in farming science that refers to the top layer of soil connecting the roots below the ground with the plants that grow above it.
“Functionally, it’s one of the most important factors in stimulating plant growth,” said the spokesperson. “Not only is soil the essence for life, but it’s also the foundation for many of the goods Solum invests in.”
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Tags: Colin Butterfield, Endowment, ESG, Harvard Management Company, Narv Narvekar, Natural Resources, Solum Partners