Greater Manchester, AP2 invest in new timberland company
The Greater Manchester Pension Fund (GMPF) and Swedish buffer fund AP2 are among investors committing to Global Timber Resources LLC (GTR), a new company designed to invest in timberland assets across different regions, including North America, Latin America, Europe and Asia.
Both pension funds have each committed $50m (€45.2m).
GTR has been launched by TIAA-CREF, a US-based financial services provider specialising in the educational, medical and cultural sectors, and its subsidiary Greenwood Resources, a global timber management company.
It closed its fundraising with commitments of $667m, with other investors including Caisse de dépôt et placement du Québec (Caisse) and the TIAA General Account.
GTR will focus on the development and management of sustainable plantation forestry assets to supply growing worldwide demand for wood and forestry products.
Jose Minaya, senior managing director and head of private markets asset management at TIAA-CREF Asset Management, said: “The macroeconomic fundamentals for timber investment are strong, and we see great potential for direct investment in emerging economies where we can benefit from low-cost production and better proximity to growing demand.”
GMPF’s commitment represents around 0.2% of its overall £17.6bn (€24.5bn) portfolio value.
Greater Manchester has now made its first timber-related investment within its special opportunities portfolio.
A spokesman for the scheme told IPE: “GMPF has no specific allocation to timber-related funds within its overall investment strategy, but such investment opportunities may be considered in the future.”
He added that the long-term returns for timberland and for the GTR investment were considered consistent with GMPF’s target returns for its special opportunities portfolio.
GWR manages around $1.5bn in assets for institutional investors, which includes the capital committed to GTR.
TIAA-CREF has been investing in timberland since 1998 and manages a portfolio of more than $2bn in timber assets around the world.
TIAA-CREF and GWR are committed to sustainable investment practices and utilise best practices set out by the Forest Stewardship Council.
In addition to signing up to the UN Principles for Responsible Investment, TIAA-CREF is also a founding member of the Principles for Responsible Investment in Farmland, launched by a group of international institutional investors in September 2011.
These principles aim to improve sustainability, transparency and accountability of investments in farmland.