Sunday, December 3, 2023

ACC takes ‘modest’ step into forestry holdings

Neal Wallace
Accident Compensation Corporation holds about a third of limited partnership with a focus on timber production.
In 2018 ACC bought a farm at Raes Junction in West Otago, and has entered a forestry right with Crown Forestry. Photo: File
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The Accident Compensation Corporation has started investing in forestry, but said it represents a modest investment at less the 0.1% of its portfolio.

In 2018 ACC bought a farm at Raes Junction in West Otago, and has entered a forestry right with Crown Forestry, which manages the Crown’s commercial forestry assets.

A spokesperson for ACC said the property is now fully planted in trees, but declined to discuss details on other specific investments saying they were commercially sensitive.

“ACC holds about 36% of a 100% New Zealand-owned limited partnership, which has a focus on timber production.

“This partnership invests in properties which will be suitable for ground-based harvesting methods as well as production thinning.”

Purchasing considerations include proximity to both ports and emerging biomass markets.

The spokesperson said higher value land is typically sold off and the balance retained for planting.

“No investments have been or are planned to be registered as ‘permanent forestry’ under the Emissions Trading Scheme.”

ACC has $44.818 billion invested, of which $1.2b is in listed infrastructure and property.

Its total investments, of which about 65% are in NZ assets, are made to fund clients who need long-term care.

ACC operates five accounts and tailors investment allocations according to the needs of those various accounts.

Each account splits its investment between ACC’s short-term operational cash portfolio, used to meet near-term expenditure requirements, and its longer-term reserves portfolio, to meet the future costs of existing claims.

The investments are also designed to avoid large swings in levy rates, which could be needed to restore asset balances.

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