London-based Gresham House is set to become one of the UK’s largest timberland asset managers after announcing its acquisition of FIM Services, a real assets investment firm.
Gresham, which currently has 31,000 hectares and £280 million ($380 million; €318 million) of forestry assets under management, will increase its portfolio to more than 100,000 hectares and £900 million upon completion of the deal.
In total, the firm will be managing more than £1.5 billion, comprising its energy storage assets and £344 million of energy and solar. The transaction is valued at £25 million.
Gresham yesterday also said it would seek to raise £15 million by issuing ordinary shares to help fund the transaction and future deals, a placing it successfully completed, the firm said, by tapping existing investors as well as new shareholders in the business.
The manager’s forestry unit is only three years old, having been created from scratch through the acquisition of specialist fund manager Aitchesse in 2015. Gresham’s forestry AUM had grown £90 million, or 50 percent since the acquisition, generating revenue of £2.8 million in the year to 31 December 2017.
“Biological growth of 4-5 percent per annum, a rising timber price and strong supply-demand dynamics make UK forestry an attractive asset class,” said Rupert Robinson, chairman of Gresham House Forestry, said in the firm’s latest annual report.
The unit manages non-discretionary accounts for institutions and high-net-worth individuals with a value of £258 million, topped with £26 million raised for the Gresham House Forestry Fund. That vehicle was launched in October 2016. Gresham says a final close at £50 million has been “penciled in” for the end of the year.