Twin Creeks closes on debut investment – exclusive

The vehicle has attracted $950m of commitments to date, and is set to close on its debut investment.

Timberland investment vehicle Twin Creeks is set to close its investment in 260,000 acres of southern US timberland valued at $560 million early next week, according to a source close to the matter.

The vehicle, which has a target of $1.1 billion and has raised $950 million so far, is a co-investment between real estate investment trust (REIT) Weyerhaeuser, the State of Oregon, the State of Washington, the Alaska Permanent Fund Corporation and Maine Public Employees Retirement System (MainePERS), which have committed to a 25 percent stake, $300 million, $200 million, $100 million and $150 million respectively.

The assets are spread across five states, and were sourced from REIT Plum Creek, which was bought by Weyerhaeuser in November for $8.4 billion.

MainePERS committed to the fund at the end of the year, after the vehicle held a first close on $803 million in September. The investment is managed by Silver Creek, an investment firm focusing on private credit, hedge fund and real asset strategies with $7 billion of assets under management.

It managing director Bob Ratliffe would not confirm whether the deal was imminent. However, Twin Creeks will continue to be invested in US timberland.

“We don’t have to buy it in those five south-eastern states, but there is no contemplation of going up the supply chain at this point.”

Asked why the investment vehicle had targeted southern states, Ratliffe said: “We would argue that the north-western US fared better [during the housing crisis] because of exports to Asia, although that has cooled off some. But timberland in the north-west is probably fully priced and won’t have the benefits of housing recovery that we will see in the south-east. We would not be opposed to own the right timberland for the right price in the north-west, and I am sure we will take a look at assets up there over time.”

He added that the assets bought from Plum Creek were attractive because of the operating strategy that was in place, “delivering timber just in time to the mills in the specs they wanted it when they wanted it”.

Twin Creeks has three years to be invested and a fifteen year fund life, but Ratliffe said investors have indicated they hope to carry on with the vehicle after that point.