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New Forests in pole position for Forest Enterprises Australia race

New Forests in pole position for Forest Enterprises Australia race | Timberland Investment | Scoop.it

NEW Forests' successful raising of $707 million for a second fund adds weight to suggestions it could be competing strongly to buy Forest Enterprises Australia, which is on the market through advisory firm Gresham, and potentially the Gunns portfolio.


New Forests has previously been named by sources as among the five groups in the contest to buy FEA.


The other four are international contenders, including US-based Campbell Group, GMO Renewable Resources, Global Forest Partners and Resource Management.


FEA was put on the market in December through Gresham and Deloitte, shortly after timber company Gunns came up for sale.

The sales price for the forestry business could be anywhere between $200m and $400m, sources said.


Initial bids closed last month for the 97,900ha of mature hardwood forests and 46,000ha of land in NSW, Queensland and Tasmania.

It is thought that the players competing to buy FEA would have also thrown their hat in the ring to buy the $400m-odd portfolio of Gunns forestry assets, which are being sold through investment bank Moelis and Korda Mentha.


New Forests would not comment on its interest in either of the offerings.

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Jeremy Grantham, the chief investment strategist at GMO, warns investors about dwindling resources

Jeremy Grantham, the chief investment strategist at GMO, warns investors about dwindling resources | Timberland Investment | Scoop.it

He called the Internet bubble, then the housing bubble. What alarm bell is Jeremy Grantham, the chief investment strategist at GMO, ringing about now?

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"...Forestry is not a bad bargain, a little overpriced maybe, but it's in a world where everything is overpriced today, once again, courtesy of incredibly low interest rates that push people into investing. A wicked plot of the Federal Reserve."


Via Jack D Bridges
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Jack D Bridges's curator insight, September 20, 2013 8:20 PM

There will be some smirks among asset managers reading this interview. "Why should I listen to this perma-bear now," they might laugh.

 

Well, if these money-runners had brains, they would thank the Fed for shoving asset prices past historical norms, sell the nosebleed expensive pieces of their portfolios (tech, consumer discretionary, etc.) and then learn a few things from Mr. Grantham. 

 

You see, Mr. Grantham has "missed" equity market rallies before. However painful, it misses the point of what GMO delivers for its clients: steady, solid risk-adjusted returns over time. 

 

Particularly for small investors, Grantham is an important read. One can assemble a basic hard asset based equity portfolio, simply by reading this interview (OK, so a bit of research & stock-picking is required, too). 

 

Sadly, applying obtuse labels is quite common in the investment business. It's a shame, because great ideas are always found from both optimistic, and more realistic, analysts. In this case, with so much optimism priced into US equities, it's a much better time to focus on what can go wrong with an investment, rather than what can go right. It's just common sense. 

 

Do yourself a favor: if you don't already know Jeremy Grantham & GMO, now is a good time to get acquainted.

 

 

 

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NZ state pension fund looks to buy forest from Harvard

NZ state pension fund looks to buy forest from Harvard | Timberland Investment | Scoop.it

New Zealand's state pensionfund is in talks to buy total control of the country's biggest commercial forest estate from the United States' Harvard University investment arm...


The New Zealand Superannuation Fund said along with global investment company GMO Renewable Resources it was in talks with Harvard Management Company to buy its 60 percent stake. The fund already owns the minority 40 percent stake in the 170,000 hectare (420,000 acres) Kaingaroa commercial plantation in the central North Island.

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The Best Bets in a Dangerous Global Market

The Best Bets in a Dangerous Global Market | Timberland Investment | Scoop.it

From a Barrons interview of Ben Inker, co-head of asset allocation at GMO:


GMO's forecast calls for timber to gain 5.9% a year, the best performance of any asset class. But timber isn't the most liquid asset, is it?


Timber is one of the least liquid assets you can find, and that's part of the reason why it has generally been priced to give pretty good returns. You can't own timber in a really liquid way. Timber REITs aren't a wonderful expression of timber. Timber companies turn out to be a lousy expression of timber. If you want to own timber, you really have to own the trees or structure it as a limited partnership that is going to actually make money as the trees are harvested. That means you are talking about a minimum of a 10- to 15-year holding period. So if you buy timber, you are going to be stuck there for awhile. You lose the ability to move to different asset classes if pricing changes. So that 5.9% forecast looks pretty today. But I wouldn't stick tons of my portfolio in timber, because maybe a year from now there are going to be some assets classes that are priced to deliver better than 5.9%.

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PPF appoints seven farmland and timberland managers

PPF appoints seven farmland and timberland managers | Timberland Investment | Scoop.it

The Pension Protection fund (PPF) has appointed seven farmland and timberland fund managers. Some managers will be funded immediately, while others are appointed for deferred investment.


The selected managers are Brookfield Asset Management, Dasos Capital Oy, GMO Renewable Resources, Hancock Timber Resource Group, Macquarie, New Forests Pty, and Stafford Timberland.

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PPF executive director for financial risk Martin Clarke said: “We now have an investment portfolio worth more than £12bn and the size of our assets means that we can take advantage of a broader range of investment opportunities.

“Investing in farm and timberland will complement our existing alternative investment portfolio, allow us to diversify our investments more widely and make our portfolio more resilient.


“But we do need to be aware that there are some risks in these asset classes, for instance land price risk. Therefore, our approach will be to invest conservatively – which is consistent with our overall low-risk strategy.”


The proportion of PPF assets allocated to farm and timberland will vary over time and depend on the opportunities available now and in the future, the fund said. All managers are appointed for four years, with the flexibility for two extensions of up to two years.

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This week's featured TIMO: GMO LLC - Renewable Resources

This week's featured TIMO: GMO LLC - Renewable Resources | Timberland Investment | Scoop.it

GMO, founded in 1977, is a privately held global investment management firm servicing clients in the corporate, public, endowment, and foundation marketplaces. As of December 31, 2011, we managed $97 billion* in client assets using a blend of traditional judgments with innovative quantitative methods to find undervalued securities and markets.

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[Editor's note: our "Featured TIMO" series does not imply an endorsement of the subject organization. It is presented only to help educate readers about this corner of the Timberland Investment space.]



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