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Private Equity Timber Funds

Investing in private equity timber funds is becoming more and more attractive to institutional investors given the good risk/reward characteristics of the asset class.  Although yearly fundraising figures have been volatile since 2003, in some years Timber Investment Management Organizations (TIMOs) have managed to attract significant investor commitments. The largest amount was raised in 2008 when four private equity timber funds closed at a total of $2.2 billion. The second largest amount of capital was raised in 2007 when another four private equity forestry vehicles raised $700 million.

The largest fund raised since 2003 is Brookfield Global Timber Fund I which closed in 2008 and received a total of $1.2 billion in commitments. The fund is managed by Brookfield Asset Management and represents 55% of the total amount of capital raised by private equity timber funds in 2008. Other notable private equity timber funds that have closed in the past six years include the $806 million Campbell Opportunity Timber Fund VI and the $375 million TimberVest Partners II, raised in 2008 and 2007 respectively.

Currently there are three private equity timber funds in the market looking to raise a total of $600 million. The largest is Global Timberland Resources Fund, managed by RMK Timberland Group, which is looking to raise $500 million and will invest in timber across North America, South America, Europe and Asia.

For more information on private equity fundraising, please see Preqin’s Funds in Market online database.

Keywords: private equity, fundraising, timber