FIM’s timber fund raises further £10m – exclusive

UK-based forestry and wind farm asset manager FIM has reopened fundraising and is expected to hold a final close on roughly $108m in November.

FIM Services, the UK-based forestry and wind farm asset manager, has raised an additional £10 million ($17 million; €12.5 million) for the FIM Sustainable Timber and Energy Fund this year after getting a wealth of interest from first-time forestry investors, according to fund manager George Krempels.

The 10-year fund, which held a first close in 2010 on £39 million, held a second close on £83 million last November. But earlier this year FIM decided to open subscriptions again to raise a further £25 million ahead of a further close expected in November. It is still awaiting confirmation for final commitments to the remaining £15 million.

The 10-year private equity fund was fully deployed before this latest round of fundraising and of the £10 million raised this year, it has already deployed £8.75 million.

The average commitment is £150,000 as the wealth of demand comes from family offices and other sources of private capital, attracted by the tax benefits on offer. Owners of forestry in the UK do not have to pay income tax or capital gains tax on forestry assets. Inheritance tax can also be limited, according to Krempels.

The fund’s initial termination is set for between 2020 and 2021 although there will be the opportunity to roll over the investments for longer, according to Krempels.

FIM Sustainable Timber and Energy Fund invests 80 percent of its assets into forestry and 20 percent into wind farms. The wind farms produce the majority of a 3 percent annual distribution to shareholders, although some of the timber is harvested to contribute.

The firm charges a 2 percent participation fee, 2 percent on any capital deployed and a 0.5 percent a year management fee. When it comes to selling the assets, FIM charges 2 percent on the sale value.