Friday, March 25, 2011
at The University of Georgia’s Timberland Investment Conference
In a conversation with Sona Blessing, Court Washburn, Managing Director and CIO of the Hancock Timber Resource Group (HTRG), shares how the timberland investment management organisation (TIMO) structure, management and investing strategy have evolved and the challenges that lie ahead since they offered institutional investors their first timberland investment fund, ForesTree One, in 1984.
Listen to the complete feature How the TIMO structure has evolved and the challenges that lie ahead since HTRG offered institutional investors their first timberland investment fund, ForesTree One, in 1984
Q1 - The TIMO Landscape - then and now
In 1984 they were US centric and capital sources were much less diverse
Today’s business is much more global, in terms of where they invest and who, and where their clients are located
Complexity - understanding the fundamentals, multiple timber markets and geographies, more diverse investor base, taxation policies, exposure to currencies
Term of investment
Types: co-mingled funds and individually managed accounts - open ended funds
Q2 - Expected returns
Nature of returns through up and down cycles
Impact of compression in discount rates
A lot more variation in realised returns than there has been in expected returns
Understanding different currency exposures
Q3 - Challenges and why investors should invest in timberland?
Provides long tailed cash flows to match long tailed liabilities
Investing outside the US
The need to understand country specific risks - regulatory, legal etc.
Exploring investing in Russia and Africa
Q4 - The performance of timberland since 1984 has been very good for timberland investors
Adapting to the ever changing landscape
"The more you are in the business, the more you realise what you don’t know as opposed becoming more certain of what you do know and you become cognisant of the challenges and uncertainties "
Weather related phenomenon and bio energy - evaluating the demand for timber going forward