Return to search

Cambridge Retirement Board issues timber RFP

The $1.1bn pension is seeking a dedicated timber manager for a $25m allocation and would also consider a timber fund that also includes farmland investments.

The Cambridge Retirement Board issued a request for proposals for a $25 million timber fund commitment earlier this month.

The request explicitly excludes REITS and states that proposals must be received before 3:00 pm on April 13.

Rafik Ghazarian, vice president of Cambridge Retirement Board investment advisor Segal Macro Advisors, told Agri Investor that while the search is primarily focused on finding a dedicated timber manager, it has been expanded to include timber-focused funds that also have a farmland component.

“This is a long-term play and on an overall fund basis, we feel strongly that this ads diversification to their portfolio and takes some of the risk off the table, and that’s why we recommend timber,” he said.

Ghazarian said that for the $25 million allocation, he ultimately hopes to find a fund offering annual returns of six to seven percent over a 10- to 15-year investment period.

At a board meeting in August, Ghazarian said that the firm had not been able to identify a “promising” timber manager and would expand the search to include natural resources funds that would include timber investments if no timber-specific funds began fundraising by the end of the year, materials posted on the $1.1 billion pension’s website show.

At a subsequent meeting in November, Hancock Timber Resources Group portfolio manager Eric Dooley detailed the performance of the Hancock Timberland X fund, the only previous timber investment from the Cambridge Retirement Board.

Dooley said that $6 million investment helped support the fund’s portfolio of 500,000 acres of timberland properties in the Pacific Northwest, Louisiana and Queensland, Australia. The fund has produced a nominal IRR of 8.5 percent and outperformed the NCRIEF Timberland index since its inception, he added.

Acknowledging that low returns had brought about a slowdown in investment throughout the timberland industry, Dooley also noted Hancock’s plans to begin raising an open-ended fund investing in both timber and farmland.

Dedicated timber funds known to be currently in the market include Olympic Resource Management’s ORM Timber Fund IV, Resource Management Service’s RMS Evergreen US Forestland Fund and New Forests’ Australia New Zealand Forest Fund 3.