Harvard’s Ex-Alternatives Head Seeks $500 Million for New Funds

  • Wiltshire teams up with former colleagues Grantham, Aguirre
  • Folium Capital to allocate funds to timberland, agriculture

Andrew Wiltshire, who formerly ran alternative and natural resource investments at Harvard University’s endowment, is co-founding a new firm and seeking about $500 million to allocate to timberland and agriculture, according to two people with knowledge of the matter.

Wiltshire is teaming up with former Harvard Management Co. colleagues Oliver Grantham, son of value investor Jeremy Grantham, and Alvaro Aguirre to start Folium Capital in Boston, according to an investor presentation viewed by Bloomberg News.

Folium Capital is at least the second firm started by former Harvard managers in the past year amid a leadership shakeup, staff cuts and the departure of top talent at the $37 billion endowment. Stephen Blyth, who replaced Jane Mendillo as head of the endowment in January 2015, remains on temporary medical leave, which began in May.

Wiltshire and Grantham declined to comment on his firm’s fundraising effort.
Aguirre didn’t respond to calls seeking comment.

The Folium founders follow other managers who left Harvard more than a decade ago amid controversy over compensation to start hedge funds. Adage Capital Management, Convexity Capital Management and Highfields Capital Management have grown into multibillion-dollar firms. Satu Parikh and Marco Barrozo, former senior managers at Harvard who left in October, are currently raising money for a hedge fund to exploit pricing inefficiencies in commodities and fixed-income markets.

Folium Capital is raising money as returns from natural resources have waned amid slowing growth in China, Brazil and other developing countries. Many universities and foundations are exploring agriculture as they seek to meet mandates to increase environmentally sustainable investments.

The new firm is seeking $250 million each for a timber and agriculture fund, said one of the people. Managers will look for opportunities primarily in North America, Latin America, Eastern Europe, Iberian Peninsula, the Nordic countries and Oceania, according to the presentation.

12% Returns

The three founders are relying on their track record at Harvard, where they helped build a timber and agriculture portfolio over a decade, according to the investor pitch. As the endowment transitioned from selling its U.S. timberland for a sizable profit, Wiltshire, Grantham and Aguirre expanded an international portfolio of timberland and agriculture investments, which grew to about $4 billion as of last year.

The natural resources portfolio posted annualized returns of 11.6 percent over the 10-year period to June 30, 2014. The portfolio had generally subdued returns in fiscal 2015, Blyth said in HMC’s annual letter.

Wiltshire, a New Zealand native who worked in the forest service there, joined the endowment in 2001 after working at GMO Renewable Resources, the forestry affiliate of Grantham Mayo Van Otterloo & Co. Wiltshire, who left Harvard in September, made $10.5 million in 2014 as managing director and head of alternative assets, up from $8.5 million the year prior, according to Harvard Management’s most recent tax filings.

Aguirre, who joined Harvard in 2003 and left last year, was paid $3.6 million in 2014 as managing director of natural resources, according to the filings, down from $9.5 million the year before, when he was the third highest paid employee at the endowment.