GLOBAL - Tectona G Capital and Investment Managers, GlobalReach Securities has launched a timber fund that could draw between US$130m - $200m of institutional money, the firm said.
The Tropical High-Grade Hardwood (Teak) Fund will invest in Forest Stewardship Council certified green-field teak plantations in Brazil and Panama, the Irish firm said. The fund will target returns of 11% over seven years.
Chairman of the fund Denis Curran said: "Irresponsible deforestation in recent decades has led to a pending crisis in the availability of natural hardwoods and an urgent need for fresh supply.
"Because teak is one of the few tropical hardwood species that can provide acceptable growth rates, is highly resistant to fire and disease and can be managed in the form of plantations, it is the ideal species to increase hardwood supply. It is also a well known and versatile commodity in the market place."
International Woodland Company head of portfolio management Henrik Lundqvist said the timber consultant is considering recommending the fund to its clients, large institutional investors largely located in Denmark and Sweden.
"We do see a strong interest in timberland. The asset class offers strong risk-adjusted returns, some cash flow and an inflation hedge," he said.
Lundqvist said timber as an asset class for institutional investors is most popular in the US, while it's still considered an emerging asset class in parts of Europe.
PP has analysed the accounts of the biggest pension consulting firms and recorded the turnover (revenue) in their most recent accounts. The full leaderboard is below…
UK defined benefit (DB) schemes have increasingly undertaken benefit reviews over the last four years resulting in an acceleration of scheme closures, Aon research finds.
Contributions are no longer sufficient to meet regular payments for three-quarters of small- to medium- sized defined benefit (DB) schemes, Buck analysis finds.