Timber funds are an increasingly popular preference for private equity investors. Essex County Council Pension Fund has recently awarded fund of funds manager Stafford Timberland with a GBP 60 million timber mandate. This reflects on a decision made by the pension fund at the beginning of 2011, whereby it was considering investing 2% of the fund’s total assets in timber-focused funds, along with increasing its overall exposure to private equity funds.
Massachusetts-based public pension fund, Bristol County Retirement System, recently issued an RFP for a new timber investment manager which is set to receive a commitment of USD 5 million from the pension fund. The deadline for the RFP was March 9th 2012, and Bristol County Retirement System is yet to announce whether a selection has been made. The pension fund has had some previous exposure to timber funds, including a commitment to Hancock ForesTree IV.
Preqin’s Investor Intelligence database currently tracks over 4,000 private equity investors. Of these LPs, 152 (3.9%) have shown an appetite for timber funds. Geographically, 82% of these investors are located in the US, with 12% based in Europe and the remaining 6% located elsewhere in the world. In terms of the types of investors that have a preference for such investments, 40% are public pension funds, with foundations and endowment plans each representing 16%. Other investors that have a preference for timber-focused investments include banks, sovereign wealth funds and family offices.