Institutional Investors

Chattanooga picks finalists in timber, ag searches

Dahab Associates CIO Steven Roth tells Agri Investor which managers did not make the cut in the $225m pension's search.

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The Chattanooga Police and Fire Pension Plan has narrowed its searches for timber and agriculture commitments to two managers each.

Resource Management Services and Molpus Wooodlands were shortlisted for the timber commitment, while UBS and Ceres emerged as finalists for the agriculture investment, according to minutes posted on the $225 million pension’s website this week.

The pension, which adopted a 5 percent overall target for both timber and ag last July,  issued requests for proposals in February for $5 million commitments to both assets classes in a search run by consultant Dahab Associates.

The shortlisted firms will be interviewed by the pension’s board at its annual meeting in September, according to the minutes.

Vying for low volatility

Dahab chief investment officer Steven Roth told Agri Investor that Chattanooga was looking to add timber and ag exposure as a fixed income surrogate offering modest returns with low volatility. He added that the current search was designed to help the pension build on its commitment of $12 million to Hancock Natural Resources Group’s combined ag and timber vehicle in October.

“Ceres is a row crop, UBS is a diversified fund; so two different flavors. RMS is an open-ended fund, so it follows what the real estate ODCE [open-ended diversified core equity] funds do, where you can put your money in and potentially put more money in, whereas the Molpus fund is a typical closed-end fund with a finite timeframe” said Roth. “There’s nothing bad about the other people that responded, these were just a better fit.”

“We don’t like anything particularly new or different; we like to stay with the old guard”
Steven Roth, Dahab Associates

Roth said five managers applied for each commitment. Applications by timber manager also included vehicles from BTG Pactual, Campbell Global and International Woodlands Company. Chess Ag, Fiera Comox and Stafford Capital Partners applied for the agriculture allocation.

Roth added that he had not witnessed any particularly significant change in the approach of managers to either timber or agriculture in recent years.

“We don’t like anything particularly new or different; we like to stay with the old guard because we can trust our belief in it,” he said.