Investing in Timberlands is for everyone, not just the big superfunds.

The opportunity for Australian and foreign investors to directly acquire Australian Timberland’s has never been better, and you don’t need to be a mega Superfund to achieve long-term secure sustainable returns.

In fact, many very highly productive, high yielding forests underpinned by secure markets are simply too small in investment size to meet the acquisition requirements of larger Timber Investment Management Organisation’s (TIMO). Therein lies the opportunity for smaller investors or emerging smaller funds who may prefer to build an aggregation of quality forestry assets over time.

The good news is that in many cases it’s the smaller timberland’s that outperform the average returns of the TIMO.

Opportunities really do exist for all interests, irrespective of investor size. The same investment principals apply for mum and dad investors, however often many value more holistic benefits to match their individual investment goals. Whether those goals include commercial timber production (local, domestic or export focus), environmental (carbon or biodiversity offset), social or even lifestyle, there are a host of reasons people invest in forests and if investing smart, forests can produce exceptional returns over the longer term.

One of our sophisticated clients has acquired numerous timberland’s across Australia over the years. His aim is simple, to sustainable harvest trees over time. No hurry, as he see’s huge benefits in the natural biological growth year on year, and the ever growing demand for the timber resource.  “Let’s face it, everyone needs forests, the demand for sustainable timber products keeps growing with an expanding population, so it makes good sense that we invest in productive forests we can managed sustainably” he said.

The common thread between all buyers irrespective of size, is that an investment in timberland is one of the only truly sustainable and environmental friendly investments. We all know that growing trees absorbs carbon dioxide and produces oxygen, something we all need, but it’s the stored carbon in trees (growing or harvested to products) that brings carbon neutrality or better.

The natural biological growth of the asset, natural hedge against inflation and the ability to match harvest to sector highs is a major draw-card. Something the world’s largest pension funds and institutional investors have known and appreciated for years, particularly those within North America. In fact, they are the largest investors of such assets throughout Australasia.

Here’s the top 10 TIMO’s and their respective global timberland assets managed on behalf of numerous pension funds, institutional investors, family offices, high net worth individuals and alike;

• Hancock Timber Resource Group – Asset value US$11.7b across 2.6m hectares
• Campbell Global – Asset value US$6.7b across 1.3m hectares
• Resource Management Services – Asset value US$4.5b across 1.1 m hectares
• Forest Investment Associates – Asset value US$4.2b across 1.0m hectares
• Brookfield Timberlands Management – Asset value US$4.0b across 1.5m hectares
• Global Forest Partners – Asset value US$3.4b across 0.5m hectares
• BTG Pactual – Asset value US$3.0b across 0.8m hectares
• The Forestland Group – Asset value US$2.4b across 1.5m hectares
• New Forests – Asset value US$2.1b across 0.6m hectares
• GMO Renewable Resources – Asset value US$1.8b across 0.5m hectares

           Source: RISI 2014 and New Forests June 2015 data.

These are some very big numbers and highlight the relative low risk of these sophisticated global markets. And there are hundreds more investors, emerging funds, family offices and alike actively valuing the security of natural biological growth.

Forestry is for everyone, its easier than you think.

Smith Agri International specialise in Agricultural/Timberland Transactions and Advisory Services throughout Australasia. We welcome all enquires and are confident we can assist you identify a forest to meet your investment goals. To view our Capability Statement, or access timberlands we have for sale ‘on-market’ simply access our website; www.smithagriinternational.com.au or if you prefer give us a call. +61 (0) 418 332 780.