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Harvard Management Company’s natural resources team spun out into an independent investment firm, according to a message CEO N.P. “Narv” Narvekar sent to HMC affiliates Thursday.

Colin Butterfield, HMC’s former natural resources chief, will head the new firm, Solum Partners.

The split marks a milestone in Narvekar’s five-year plan to restructure the University’s investments. The natural resources team was the only remaining group of employees managing an asset class internally.

In his message to affiliates, Narvekar praised Butterfield’s work at HMC, where he has worked since 2016.

Under Butterfield’s leadership,“the NR 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, their employees, and the communities in which they operate,” Narvekar wrote.

In his message Tuesday, Narvekar cited two justifications for the outsourcing.The move allows HMC to retain exposure to desirable aspects of its natural resources portfolio, while providing the investment team with “a pathway for growth,” he wrote.

Narvekar noted that Harvard will “continue to work closely” with the team at Solum as investors and advisors on the management and sale of the University’s remaining natural resources assets.

Harvard maintains the largest University endowment in the world. In a memo last week, Narvekar announced that the endowment returned 7.3 percent on its investments for FY2020, bringing its value to a record $41.9 billion.

Narvekar has long sought to decrease the University’s investments in natural resources, an “illiquid asset” that yielded persistent low returns. He wrote that HMC had decreased its investments in natural resources during his tenure from 9 to 4 percent of overall investments.

Despite those efforts, in 2019, Harvard returned negative 12.4 percent on its investments in natural resources, marking the lowest returns of any asset class. At the time, Narvekar blamed the illiquid assets for “disappointing” overall returns for the endowment.

—Staff writer Ellen M. Burstein can be reached at ellen.burstein@thecrimson.com. Follow her on Twitter @ellenburstein.