Why Yale Owns a Forest

In New Hampshire’s Great North Woods, a wilderness of unspoiled lakes and waterfalls just south of Canada, Rick Samson is monitoring a piece of Yale’s $25 billion endowment.

From a mud-splattered pickup, Samson, a 71-year-old Coos County commissioner wearing sunglasses, shorts, and a moose T-shirt, watches with disapproval as a pincer mounted on the back of a truck drops logs into another truck at the edge of a clearing about the size of a football field. The area is part of the thousands of acres the university owns in the state. Samson and his passenger, Wayne Montgomery, a 40-year forest industry veteran clad head to toe in khaki, blast Yale’s methods. “They’re cutting everything, even the growing stock,” Montgomery says as he watches the trucks.

For at least two decades, Yale and its celebrated endowment manager, David Swensen, have led a land rush by the richest colleges. Funds snapped up forests as a way to hedge against inflation and the risks of stocks and bonds, and to take advantage of endowments’ unusual ability to make investments that might not be easy to sell quickly. (Unlike most investors, big college endowments have “a time horizon measured in centuries,” Swensen once wrote.) It paid off handsomely until recently, when returns slumped and exposed more of the downsides of investments that literally grow. One is reputation risk: Some residents of Coos County and a Canadian First Nations tribe are angry that a company hired to manage Yale’s land, Wagner Forest Management Ltd., has signed a lease for a power line that will run through about 24 miles of the university’s forests.

Yale declined to comment. It has described its forest management methods as “world-class” and sustainable, and its timber holdings as stellar long-term investments. The university’s New Hampshire forest includes an expanse of maple and birch trees open to the public and popular with riders of ­all-terrain vehicles and…

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