BTG Pactual closes $860m Brazil timber fund, eyes future vehicles

Brazilian investment bank BTG Pactual closed its first timberland fund on $860m after exceeding its $750 million target.

BTG Pactual today closed its first timberland fund on $860 million after exceeding its $750 million target. The fund will invest in timberland in Brazil and other Latin American countries, according to a press release.

The oversubscribed fund comprises four different vehicles to account for onshore and offshore assets and investors, Agri Investor learned in March. It planned to raise $200 million from BTG Pactual, according to an executive summary.

The capital was mostly raised from institutional investors.

“There are a number of compelling reasons to invest in Brazilian timberland,” said Gerrity Lansing, head of BTG Timberland Investment Group, in a statement. “In addition to a high degree of technological advancement, the asset class has not been a focus for many institutional investors, and the barriers to entry are high, particularly for managers without a Brazilian-based team and capital sources.” BTG’s investment approach is based on patience and discipline, which gives it considerable flexibility in terms of structuring transactions and managing assets over the long term, Lansing said.

The firm is developing vehicles for markets outside South America, the press release said: “Brazil Timberland Fund I represents the next phase of BTG Pactual’s long-term timberland investment strategy, with additional vehicles focused on US and European markets currently under development.”

BTG Pactual started investing in Brazil timberland in 2008 and assets owned in South America account for 30.1 percent of its total portfolio. BTG owns 610,010 acres of timberland in Brazil and 79,171 acres in Uruguay as of the end of 2014, the summary shows. Its Timberland Investment Group currently manages over $3 billion in the US, Europe, Latin America and South Africa.

“We are gratified by the number of leading institutional investors who have committed capital to this fund,” said Carlos Fonseca, a partner at BTG, in a statement. ”The success of this fundraising reflects investor enthusiasm for our platform’s unique position in Latin America.”

Watch out for more coverage and details about the fund close later this week.