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US-Based LPs Continue to Dominate Timber Investments

US-Based LPs Continue to Dominate Timber Investments | Timberland Investment | Scoop.it

LP interest in timber funds continues to increase, with a number of US-based investors including timber investments as part of their private equity portfolio. Preqin currently tracks 4,544 LPs active in the private equity asset class, 214 of which are interested in investing in timber funds. There has been an increase in the number of LPs with an interest in timber investments, with 4.7% of the LPs currently tracked by Preqin expressing an interest in the fund type, compared to 3.9% of LPs as at the end of Q1 2012.

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Timberland Investment
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Sponsored by...

Sponsored by... | Timberland Investment | Scoop.it

Prentiss & Carlisle  is one of the largest timberland asset managers in North America. P&C provides ongoing management services on approximately 1.75 million acres of timberland located in Maine, Michigan, New York, Vermont, Wisconsin, Ontario and Quebec. Nearly every acre under management is certified by the Forest Stewardship Council through either our clients or through P&C itself, which holds FSC certificates for both Forest Management and Chain-of-Custody.


P&C provides turnkey land management from long-range forest planning through on-ground forestry, marketing of forest products, harvesting, transportation, road construction and maintenance, stump-to-mill accounting and reporting, client cash management, administration of third-party relationships, public advocacy/representation and strategic asset planning. P&C also provides specialized consulting services in related areas of expertise:

  • Timber inventory design, execution and analysis
  • G&Y modeling and timber harvest scheduling
  • GIS mapping and data management services
  • Timberland valuations and appraisals
  • Acquisition and disposition due diligence
  • Market studies
  • Timber supply modeling


About this magazine

Our aim is to provide a gathering place for news and opinion about timberland investing. We cover both publicly traded issues including listed timber companies, real estate investment trusts (REIT's), and exchange traded funds (ETF's), and the more private world of institutional investing in timberland. Our focus is on: the rationale for investing in timberland; performance of publicly traded timber investments; timberland deals and transactions; timber supply, demand and prices, and; public policy issues that impact timberland investing. Not interested in all of these topics? You can easily filter the stories by using the Tags button above.


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Some useful links


Stock quotes, news and financial metrics

These links take you to customized Google Finance pages for timber REITS, indexes and other publicly traded companies of interest:


Prentiss & Carlisle newsletters

Quarterly updates on conditions in our operating regions


Timber Mart North 

Lake States price reporting service published by P&C


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Church of England boosts forestry stake

Church of England boosts forestry stake | Timberland Investment | Scoop.it
The Church Commissioners have acquired a forestry portfolio for £49m (€61m) for their £6.1bn endowment fund, used to finance the Church of England’s activities, as well as some of its pension obligations.

The estates were purchased from UPM Tilhill, a forestry and timber harvesting company, and are made up of 13 forests in Scotland and two in Wales, including two operating wind farms and a mountain biking visitor centre.

They take the Commissioners’ total UK forestry holdings to £100m, all of which are certified to Forest Stewardship Council (FSC) standards. The Commissioners are now the largest private commercial forestry investor in the UK.

The Commissioners have targeted forestry investments since 2010, and since inception these have delivered an annualised double digit return.
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Group Challenges Timber Producer's 'Green' Label

Group Challenges Timber Producer's 'Green' Label | Timberland Investment | Scoop.it

A watchdog group is challenging the environmentally friendly "green lumber" certification for Plum Creek Timberlands, one of the nation's biggest landowners and timber producers.

The Center for Sustainable Economy, based in Lake Oswego, Oregon, filed the complaint Thursday with a nonprofit group that verifies whether timber producers follow standards for environmentally responsible logging, including replanting after harvest, protecting water and biological diversity, and complying with environmental laws and regulations.

The complaint covers Plum Creek logging in Oregon's Coast Range, citing 11 civil citations over the past six years for violating state logging regulations, including four citations for exceeding the clear-cutting limit of 120 acres. The complaint includes Google Earth images showing landslides in areas stripped of trees by Plum Creek.

"The fragmentation caused by large clear-cuts is a driver of extinction for wildlife dependent upon interior forest conditions and one of the most damaging ecological impacts associated with forest operations in Oregon," the complaint said.

The company also was cited for failing to protect riparian zones along fish-bearing streams, allowing logging road drainage into a stream and failing to notify state regulators of changes in logging operations.

Seattle-based Plum Creek said in a statement that it was aware of the complaint and reviewing it.


"Plum Creek is committed to practicing sustainable forestry where ever we operate," company spokeswoman Kathy Budinick said in an email. "There is an established process in place for handling such complaints, and we will engage fully in the process to understand and address this complaint."

On its website, the company states prominently that all its timberlands are certified by the nonprofit Sustainable Forestry Initiative.

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Molpus Woodlands Group Announces the Purchase of 112,238 acres of Timberland in New York

Molpus Woodlands Group Announces the Purchase of 112,238 acres of Timberland in New York | Timberland Investment | Scoop.it

The Molpus Woodlands Group, LLC (Molpus), a timberland investment management organization headquartered in Jackson, Mississippi, announced today, on behalf of a client, the successful purchase of approximately 112,238 acres of timberland in the north-central Adirondack Park area of upstate New York.

“We will use our existing expertise in this region to practice high-quality stewardship with particular attention to conserving resources and the diversity of the forest.”

The property, located in three counties, has been in timber production for more than 100 years and is located in a vibrant hardwood sawtimber and pulpwood market area. The majority of the property falls within the Adirondack Park Reserve. Molpus currently maintains an office in Saranac Lake, New York, to oversee the management of an additional 161,000 acres in this area.

“We are pleased to expand our existing operations in upstate New York,” said Ken Sewell, Chief Operating Officer of Molpus Timberlands Management. “We will use our existing expertise in this region to practice high-quality stewardship with particular attention to conserving resources and the diversity of the forest.”

State Department of Environmental Conservation (DEC) Commissioner Joe Martens said, “Governor Cuomo has demonstrated that New York is Open for Conservation and Business, and we welcome Molpus’s investment in our state’s excellent timber resources. The acquisition of 112,000 acres of Adirondack Timberlands by Molpus, that is subject to a working forest conservation easement held by DEC, demonstrates that sustainable forest management is good business and benefits Adirondack communities, businesses and visitors.”

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Land board seeks sale of Elliott State Forest

Land board seeks sale of Elliott State Forest | Timberland Investment | Scoop.it
Members of the Oregon State Land Board said Tuesday they want to sell the Elliott State Forest to another government agency or public-private partnership.

The proposal would provide the State Land Board with a way out of the long-running arrangement of logging the Elliott State Forest, which is northeast of Coos Bay, to generate money for public schools. That system has generated more controversy and less revenue in recent years, as the state scaled back timber harvests following lawsuits over federally protected species in the forest.

Environmental groups and members of the public have also urged the state to manage the forest for conservation and recreation, goals that clash with the State Land Board’s duty under the Oregon Constitution to maximize timber revenue for schools.

The three members of the board, Gov. John Kitzhaber, Secretary of State Kate Brown and State Treasurer Ted Wheeler, said during a meeting Tuesday that they want employees of the Department of State Lands to continue to proceed with an option to request proposals from entities interested in purchasing the 84,000 acres in the Elliott forest which the state manages to benefit schools.
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Private Forest Owners Aging, Parcels Shrinking

Private Forest Owners Aging, Parcels Shrinking | Timberland Investment | Scoop.it
The age of forest landowners across the country is increasing and the size of parcels they own is shrinking ? and that has state, federal and private experts fearing for the long-term health of millions of acres of American woodlands.

The concerns of forestry professionals are more subtle than the typical worries over large-scale development: as the parcels of land get smaller the people who own them might not have the same commitment to the forests as the previous landowners.

"Our alarm bells are starting to go off, not because landowners are suddenly older, but because it's been going on long enough now that we are really beginning to see the impacts," said Mary Sisock, an assistant professor of extension forestry at the University of Vermont, who has worked on the issue across the country.

Owners of smaller parcels are less likely to invest in a forestry management plans, and managing for wildlife is more difficult than on larger plots, Sisock said. And once the land gets cut up it's more likely it will be developed, and once developed there's no chance it will ever again be a working forest, she said.
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NCSU deal to sell Hofmann Forest falls through

NCSU deal to sell Hofmann Forest falls through | Timberland Investment | Scoop.it

The Endowment Fund of North Carolina State University said Friday that a deal to sell the 79,000-acre Hofmann Forest near the coast is off after the two firms planning to buy the land couldn't finalize the financial contingencies of the contract.

The research forest will continue to be owned by the endowment fund for the benefit of the university's College of Natural Resources, officials said, adding that the endowment board and the Natural Resources Foundation hope to find another buyer.
***
N.C. State had planned to sell 56,000 acres of Hofmann Forest to Resource Management Service of Alabama, a timber management firm, and the remaining 23,000 acres to Hofmann Forest LLC, an Illinois-based agribusiness firm that planned to develop part of the property.

The two firms would have paid a total of $131 million for the land.

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Timber Supply and Demand Trends Confirmed by New FIA Data

Timber Supply and Demand Trends Confirmed by New FIA Data | Timberland Investment | Scoop.it
Since 2006, when market prices for pine sawtimber started to soften, the amount of timber harvested has decreased. Timberland owners adjusted their harvest schedules longer rotations with more second thinning regimes. This change has led to an accumulation of sawtimber in forests in the US South, and this in turn has led to the number of acres being regenerated dropping precipitously.


New data from the U.S. Forest Service’s Forest Inventory and Analysis group confirms these timber supply and demand trends. Based on the 2013 measurement cycle, the inventory of sawtimber has increased 3.2 percent annually since 2007, or 21 percent. Pine pulpwood inventory has also increased, though by less than half as much as sawtimber; since 2007, inventory in the pine pulpwood category has increased by 9 percent or 1.4 percent annually. This new data suggests that much of what we have heard about forest resources being under significant stress should be questioned.
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Kaingaroa Forest has new majority shareholder

Kaingaroa Forest has new majority shareholder | Timberland Investment | Scoop.it
CANADA’S Public Sector Pension Investment Board (PSP Investments) is now the majority shareholder of the assets of Kaingaroa Timberlands. The board is one of Canada’s largest pension investment managers, with over CAD 93 billion of assets under management at 31 March 2014. Their mandate is to invest funds for the pension plans of the Canadian Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force.

The investment board completed the purchase of the remainder of the share parcel in Kaingaroa Timberlands from Harvard Management Company in late November. PSP Investments now owns 58,75 percent of the assets with the New Zealand Superannuation Fund holding 38,75 percent and Kokano Investment Partnership owning 2.5 percent.

The 189,000 hectare Kaingaroa Forest on the Volcanic Plateau of New Zealand’s central North Island makes up the bulk of Kaingaroa Timberlands’ assets. Other assets include a log processing plant at Kaingaroa, a log yard at Murupara and a nursery at Te Ngae, Rotorua.

No details were available on the purchase price. However in 2012 the NZ Super Fund valued its (then) 40 percent share at $954 million. In 2004 Harvard beat China's Citic ((China International Trust and Investment Corporation) to buy the Kaingaroa assets and cutting rights from receivership in 2004. No price was disclosed at the time but it was estimated to be over USD 600 million.
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New federal analysis favors Maine biomass plants

New federal analysis favors Maine biomass plants | Timberland Investment | Scoop.it

A new analysis by the federal Environmental Protection Agency may be good news for Maine firms that make electricity by burning wood, but some environmental groups are crying foul.

The new EPA analysis, issued last week, suggests how the federal government will count greenhouse gas emissions from wood-fired biomass facilities, and an accompanying memo from a top-ranking EPA official suggests biomass producers will likely get a pass when it comes to strict, new carbon dioxide regulations.

Carbon dioxide is a gas byproduct that comes from burning any carbon-based fuel, including coal, petroleum and wood, and it is largely blamed for the effects of global climate change.

But the new analysis suggests that because wood-fired biomass facilities are fueled with forest byproducts, namely leftover branches, limbs, chips and sawdust, the net impact on the environment is neutral over time. The analysis involves some complex science that models the amount of CO2 live trees absorb compared to the amount that's released when they either decompose naturally or are burned for energy.

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Real Assets Really Deliver Superior Returns

Real Assets Really Deliver Superior Returns | Timberland Investment | Scoop.it

***
[A] survey by Greenwich Associates released earlier this month reveals some lingering investor misperceptions about listed and private real asset investments.


We were surprised by one of the survey’s findings in particular: Institutions were more likely to count illiquid, private market strategies, rather than fully liquid real assets, as real assets. In our view, however, given the fundamental characteristics and attributes that listed and private categories have in common, the extent of institutional reliance on ownership structure to drive allocation decisions doesn’t seem justified.


First and foremost, backing every investment in private and listed real assets are hard, tangible assets. At the same time, the public and private market counterparts that make up each real asset category have many economic sensitivities in common that complement each other and serve as valuable portfolio diversifiers. Investors would be better served by focusing more on the fundamentals of real assets and less on their varied ownership structures.
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Our research examined core real asset categories in the context of three commonsense investment criteria: meaningful diversification benefits to a portfolio concentrated in stocks and bonds, the potential to deliver attractive returns over a full market cycle and the expectation of showing higher sensitivity than stocks and bonds to unexpected inflation. For the most part, real assets scored favorably on each of the above criteria, both as stand-alone allocations and — more reliably — when combined in a diversified multiasset class framework.


By comparing the long-term performance of various asset classes during periods in which stocks and bonds have underperformed, the diversification potential of real assets becomes evident.
***
In contrast, listed real asset categories — real estate, commodities, natural resource equities and infrastructure — outperformed stocks and bonds while delivering positive real returns. The major categories of private real assets — private real estate, private infrastructure, timberland and farmland — similarly showed strong performance under these conditions.
***
Because private investments are not valued daily, a common perception is that they are not particularly risky. We need only to point to the dearth of liquidity in the aftermath of the 2008–’09 financial crisis to dispel this myth. Moreover, measurement biases are a well-known problem with private market investments. Such distortions should be considered carefully when building a long-term allocation strategy.


Overall, we see far more similarities than differences in the potential for both listed and private real assets to diversify a portfolio of stocks and bonds, improve overall portfolio efficiency and boost risk-adjusted returns.

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2014 KPMG Timberland Investor Survey

2014 KPMG Timberland Investor Survey | Timberland Investment | Scoop.it

Get it here

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Canada, U.S. at loggerheads again over lumber

Canada, U.S. at loggerheads again over lumber | Timberland Investment | Scoop.it
With less than a year to go until the Canada-U.S. Softwood Lumber Agreement expires, lines are being drawn on both sides of the border over the future of lumber trade between the two countries.
Canadian producers say they want to extend the agreement, which has brought an uneasy peace to the decades-long lumber war since it was signed in 2006, but their U.S. counterparts say they won’t sign on again.
The U.S. Lumber Coalition, a lobby group representing American lumber companies and timber owners, said last week it’s not going to renew the agreement when it expires next October. It has expressed its anti-deal position to the U.S. government but it has yet to say publicly what it intends to do.
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Bond yield rise will be ‘acid test’ for real assets

Bond yield rise will be ‘acid test’ for real assets | Timberland Investment | Scoop.it

Two thirds of investors will rethink their allocations to real assets in the event of a significant rise in interest rates, according to research. The BlackRock and Economist Intelligence Unit survey of global institutional investors found almost half (47%) said low interest rates influence their investments in real estate, infrastructure and commodities.
***
This was in spite of 60% saying they planned to increase allocations to real assets in at least one category over the next 18 months. Almost half of infrastructure investors, 48% of real estate investors and 46% of commodities investors expected to increase their allocations in that time frame. One of the main attractions of real assets is that they provide a stable income in an extremely low-yield environment. Bond yields are expected to rise when the US Federal Reserve and Bank of England increase interest rates next year.


Future Fund of Australia chief investment officer Raphael Arndt said: "The acid test will be when bond yields rise in a few years. We are seeing the start of that cycle now and how real assets perform for us in the coming years, and through the rest of the cycle, will prove to be the most important thing for us." He added that low-risk infrastructure assets are very expensive right now and are also very susceptible to rising rate cycles.


London Pensions Fund Authority chief executive Susan Martin said real assets were attractive because of the potential illiquidity premium in a low-rate environment.She added: "There are still plenty of opportunities in the UK, Europe and Southeast Asian countries [in real estate]. The risk is the same as in most real assets-too much money chasing opportunities, which may lead to bubbles and drive down return to an uneconomic level."

Sam Radcliffe's insight:

It will be interesting to see how this plays out in timber. My gut feeling is that a number of institutions would show timber the door if they could get decent fixed income in a more liquid and understandable investment.

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CEO gives back bonus, says he doesn't deserve it

CEO gives back bonus, says he doesn't deserve it | Timberland Investment | Scoop.it
Rick Holley is CEO of Plum Creek Timber Co. PCL 0.67% , a Seattle-based real estate investment trust that owns and manages around 6.8 million acres of timberland in 19 states. Today Holley disclosed, via a regulatory filing, that he has returned 44,445 restricted stock units back to the company because “he does not believe that he should receive such an award unless Plum Creek’s stockholders see an increase in their investment return.”

At today’s opening price of $41.80 per share, Holley’s giveback would work out to more than $1.85 million.

To be sure, it’s been a rough 18 months for Plum Creek shareholders, in part due to low levels of new home construction. The stock hit an all-time high of $54.04 per share on May 12,2013, before falling as low as $39 per share on October 1, 2014. Revenue has also been nearly flat over the past two years, while net income is expected to fall in fiscal 2014. That said, it’s hard to remember the last time a CEO voluntarily gave up stock as a sort of apologia to disappointed investors.
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Close of successful final fund raising for FIM Sustainable Timber & Energy LP

Close of successful final fund raising for FIM Sustainable Timber & Energy LP | Timberland Investment | Scoop.it
FIM Services, the specialist forestry and renewable energy investment manager, today announces the close of the successful final fund raising for FIM Sustainable Timber & Energy LP (STELP), securing new subscriptions of £33million.

The LP was significantly oversubscribed, closing 32% over the £25 million target, having received overwhelming support from existing Limited Partners and attracted new high net worth investors. FIM believe this is an endorsement of both the LP’s performance to date (annualised return of 15% since inception) and its business plan – a combination of long term capital growth from timberland and a 3% post tax annual distribution, which is funded by timber sales and income from high yielding renewable energy assets.
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Timber Harvests in the US and Canada Rising the Past Four Years as the Result of Higher Log Trade and Lumber Production

Timber harvests in North America were up for the fourth consecutive year in 2013, reaching 510 million m3, based on analysis by WRI. However, despite an annual increase of three percent each over the past four years, harvest levels in North America are still substantially lower than what they were before the great recession. Ten years ago, the total timber harvest in North America was about 40% higher than in 2013, and just the harvest in the US itself at that time was more than what was logged in all of North America last year, as reported in the latest issue of the Wood Resource Quarterly (WRQ).

In 2013, softwood removals in the US were up by three percent from the previous year, primarily as a result of higher log exports to Asia and increased domestic lumber production. Higher manufacturing of hardwood lumber and of OSB were the main drivers of the increase in hardwood timber harvests last year.

Demand for logs from the pulp sector, which consumed about 45% of the total timber harvest in 2013, fell as a result of lower pulp production and increased availability of residuals chips from the sawmilling sector. However, logging activities varied throughout the country with some regions, such as the northeast and part of the South, recording only modest increases in roundwood removals, while for example the forest-rich western Oregon harvested 13% more volume in 2013 than in 2012 thanks to log and lumber exports to Asia.

Timber harvests in Canada have gone up every year since 2009, reaching over 130 million m3 in 2013 - almost 30% more than in 2009. A combination of higher log exports to China, a rise in OSB production, and increased demand for logs from the domestic lumber industry have been the major drivers for higher log demand the past few years, according to the WRQ (www.woodprices.com). The timber harvest trend in Canada has mirrored the US trend with much higher harvest volumes ten years ago, a sharp decline in 2008-2009, followed by a slow and steady increase the past four years.

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Enviva and Hancock Natural Resource Group Partner to Develop Industrial Wood Pellet Projects in the Southeastern U.S.

Enviva and Hancock Natural Resource Group Partner to Develop Industrial Wood Pellet Projects in the Southeastern U.S. | Timberland Investment | Scoop.it
Enviva Holdings, LP and John Hancock Life Insurance Company announced today that they have partnered to develop industrial wood pellet production plants and marine export terminals in the southeastern U.S. 

Through their affiliates, Enviva Development Holdings, LLC ("Enviva") and Hancock Natural Resource Group, Inc. ("HNRG"), the companies have committed to invest up to an aggregate of $320 million in equity capital in Enviva Wilmington Holdings, LLC (the "Joint Venture").

The Joint Venture plans to construct an industrial wood pellet production plant in Sampson County, North Carolina, a marine export terminal at the Port of Wilmington, North Carolina, and potentially other wood pellet plants and marine terminals in the southeastern U.S.  Enviva will serve as the managing member and operator of the Joint Venture.  The Joint Venture expects to commence construction of the Sampson plant and Wilmington terminal later this month.  Wood pellet production from the Sampson plant will be exported through the Wilmington terminal under long-term contracts with major European power generators.  The Joint Venture's customers are replacing coal with wood pellets to improve the environmental profile of energy generation.
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Resolute Forest to shut two Quebec mills, one in Ontario

Resolute Forest to shut two Quebec mills, one in Ontario | Timberland Investment | Scoop.it
Resolute Forest Products Inc. (TSX:RFP) is reducing its capacity for making newsprint at three mills in Ontario and Quebec, at a cost of 300 jobs overall as it copes with ]a global decline in newspaper circulation and the effect of a spruce budworm infestation on lumber supply.

Resolute is closing the Iroquois Falls plant in Ontario and paper machines at its Baie-Comeau and Clermont factories in Quebec, costing 120 jobs, and the Iroquois Falls plant in Ontario, which will eliminate 180 jobs, the Montreal-based company said Thursday.

The Baie-Comeau machine is already idled while Clermont will be permanently closed near the end of January.

Resolute says it’s coping with a long-term decline for several reasons, including market conditions, costs and “ill-founded” campaigning against its forest practices by environmental groups.
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Potlatch Completes Timberland Acquisition and Board Increases Dividend 7%

Potlatch Completes Timberland Acquisition and Board Increases Dividend 7% | Timberland Investment | Scoop.it
Potlatch Corporation (Nasdaq:PCH) announced today that it has closed the previously announced purchase of approximately 201,000 acres of timberlands in Alabama and Mississippi from affiliates of Resource Management Service, LLC for $384 million. The transaction was first announced on October 20, 2014.

Potlatch also announced that its Board of Directors has declared a dividend of $0.375 per share payable December 31, 2014 to stockholders of record on December 16, 2014. This is a 7 percent increase relative to the prior quarterly dividend of $0.35 per share.

The timberland acquisition was financed using cash and $310 million of new long-term debt. Moody's confirmed our Baa3 investment grade debt rating with a stable outlook earlier this week.
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California firm submits winning bid for East Millinocket mill at $5.4M

California firm submits winning bid for East Millinocket mill at $5.4M | Timberland Investment | Scoop.it
A California investment firm that liquidated the only papermaking facility it ever owned successfully bid $5.4 million for the shuttered Great Northern Paper mill in East Millinocket on Tuesday.

Sharon Kopman, who bid on behalf of Hackman Capital Partners of California, said that finding an operator to reopen the paper mill is an option. Founded in 1986 and headquartered in Los Angeles, the privately held, asset-based investment firm owns 25 million square feet of industrial property throughout the country but does not operate any paper mills, she said.

“All of our options are open,” Kopman said. “We don’t know what’s going to happen.”

U.S. Bankruptcy Judge Louis Kornreich approved the deal Tuesday in a hearing in U.S. Bankruptcy Court in the Margaret Chase Smith Federal Building. He signed an order authorizing the sale late Tuesday afternoon.
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Canadians have eye on $1bn of forestry assets

Canadians have eye on $1bn of forestry assets | Timberland Investment | Scoop.it
CANADA’S Public Sector Pension Investment Board could be about to swoop on one of Australia’s most valuable timber plantations, with sources saying about $1 billion worth of forests owned by Hancock Timber Resource Group are on its radar.

PSP executives have been in Sydney this week sounding out counterparties ahead of what some say is shaping up to be an aggressive acquisition spree by the Canadians focusing on Australian property, agriculture and billions of dollars’ worth of upcoming infrastructure assets for sale by federal and state governments.

It is understood a major Australian acquisition is on the cards by PSP and the seller it is engaged with is Hancocks.

Recent forestry portfolios placed up for sale have struggled to secure strong prices, but the industry is now shaking off pain from weaker industry demand and collapsed managed investment schemes, which could see some plantations sell for some more bullish prices, with an increasing appetite for timber from woodchip markets.

In recent months, Forest Enterprises Australia was sold by receiver Deloitte on behalf of investors to RMS for between $125m and $150m, far below some expectations of up to $400m.
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Molpus Woodlands Group Announces the Closing of 73,000 Acres of Timberland in Alabama

Molpus Woodlands Group Announces the Closing of 73,000 Acres of Timberland in Alabama | Timberland Investment | Scoop.it
The Molpus Woodlands Group, LLC (Molpus), a timberland investment management organization (TIMO), headquartered in Jackson, Mississippi, has announced today, on behalf of a client, the successful purchase of approximately 73,000 acres of timberland north, east, and west of Birmingham, Alabama.  The purchase occurred in installments starting in October 2013.

The timberland, located in thirteen counties, consists of well-stocked loblolly pine plantations distributed among all age classes.  Molpus currently maintains an office in Hoover, Alabama, to oversee the management of an additional 93,000 acres in the Birmingham area. 
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Muddy Waters goes after another Chinese timber company

Muddy Waters goes after another Chinese timber company | Timberland Investment | Scoop.it

Some of the world’s most prominent hedge-fund managers have gathered in London this week to exchange their best ideas.


The biggest market mover was Muddy Waters Research chief Carson Block. A noted short seller now mulling a hedge-fund launch, Block took aim at Chinese forestry company Superb Summit International Group, questioning its valuation of its timber assets.


“It seems there is really little to no forest,” Block alleged.


Block has made something of a cottage industry taking down North American-listed Chinese companies, and especially those in the timber industry; in 2011, he asked similar questions of Sino-Forest Corp., sending its shares plummeting and costing major Sino-Forest investor Paulson & Co. $100 million.

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Editorial: Timber will have a role in reinvented economies

Editorial: Timber will have a role in reinvented economies | Timberland Investment | Scoop.it
The New York Times ran a story in its Saturday editions about Sweet Home and the town’s attempts to redefine itself now that federal forests don’t produce nearly the level of timber that they have in the past.

The story likely was of interest to the paper’s readers, but it probably didn’t tell Sweet Home residents or citizens of Linn County anything they didn’t already know.

But it sometimes is worthwhile to take a look at the broader issues at play here, and the Times story offers an opportunity to do that again. And it’s particularly timely, considering that the lame-duck session of Congress is poised to take another whack at legislation that could increase the timber harvest on the state’s Oregon & California Railroad lands.

The notion of reinvention is at the heart of the Times story, and that’s another verse in a song we’ve heard many times before: Timber towns around the West need to reinvent themselves to accommodate an era with fewer jobs in the forests. We buy into some of that. But there needs to be a place for timber even in these reinvented Western communities, and it’s awfully easy to forget about that.
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Calpers Reviews Its Timber Holdings

Calpers Reviews Its Timber Holdings | Timberland Investment | Scoop.it
The California Public Employees Retirement System is reviewing its timber holdings following a period of poor performance and questions about whether the investments are large enough to impact overall returns for the nation’s largest public pension fund.

Top investment officers and consultants to the system known by its abbreviation Calpers discussed the $2.3 billion commitment at a board meeting Monday. One consultant, Wilshire Associates managing director Andrew Junkin, hinted at the review in an Oct. 22 letter to Calpers investment committee chair Henry Jones that cited the portfolio’s “structural weaknesses” and an evaluation of its “efficacy.”

A Calpers spokesman said no decisions have been made about the future of the timber portfolio. “This process has just begun,” he said via email.

Forests valued for their timber are Calpers’ worst-performing asset since the financial crisis, with returns down .8% over the last five years and 1% over the past three years. The portfolio gained 2.5% during the 2014 fiscal year but that was well below internal goals and industry averages.

Calpers is one of the largest holders of timber in the U.S. and owns 1.46 million acres, according to Forisk Consulting LLC. But one problem identified by Mr. Junkin is that these holdings are entirely concentrated in one part of the country — the U.S. Southeast. Outside the U.S. Calpers also owns properties in Brazil, Guatemala and Australia. The forests are also struggling due to the “timing of the original purchases,” according to the letter.

The size of the program presents another challenge. The holdings represent roughly 1% of total assets at Calpers, which were $296.4 billion as of Nov. 13.

“It could be argued” the current allocation “is not large enough to have a significant impact,” Mr. Junkin said in his letter. At the same time, “it would be massive challenge” to increase the size of the timberland holdings “to something more impactful, say 5%.”
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