Hancock Timber Resource Group, the world’s largest timberland investment manager, has bought 98,000 acres of Florida forest for $120 million from Plum Creek Timber, pouncing on the listed firm’s move to offload non-core investments.
The deal boosts Hancock assets in the southern US timber heartland, which accounts for around one-third of its plantations by value. Hancock, a Boston-based division of US insurer Manulife, owned $11.7 billion of assets at the end of December 2014, with its forestry holdings spread across the US, Canada, Australia, New Zealand, Brazil, and Chile.
The firm invests on behalf domestic US and international investors, through funds and separately managed accounts. It recently promoted Bill Peressini to chief executive from chief financial officer, following the retirement of long-standing boss Dan Christensen.
The sale follows Plum Creek’s establishment of a joint venture with investment firm Silver Creek Capital Management, and the raising of $600m in capital from three large US state funds. One of the US’s handful of timber real estate investment trusts (REITs), Plum Creek has been selling off non-strategic assets to focus on potentially higher yielding opportunities.
“The agreement allows our company to take advantage of a market opportunity and reflects our long-term strategy designed to upgrade the value and productivity of our timberland portfolio over time through the identification and sale of non-strategic lands. While these lands have been well-managed, the significant hardwood component of the property didn’t fit well with our broader Southern timberland portfolio,” Plum Creek chief executie Rick Holley said in a statement.
The timber group, which is US only, manages over six million acres of forest across 19 states and has a market capitalisation of just over $7 billion.