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MassPRIM to replace timber consultant

MassPRIM's Real Estate and Timberland Committee recommended that Danish timberland investment manager International Woodland Company will be paid a total of $400,000 over three years.

The Real Estate and Timberland Committee of the Massachusetts Pension Reserves Investment Management Board (MassPRIM) recommended Monday that the $62 billion pension hire International Woodlands Company as its timberland consultant.

The recommendation will be voted on by the MassPRIM Board at its next meeting on May 16.

In December, MassPRIM issued a request for proposals for a general real estate consultant, a timber consultant and multiple real estate project consultants.

Townsend Group currently advises MassPRIM on its timberland investments. Townsend has provided portfolio services, support on other requests for proposals and an annual report on MassPRIM’s real estate holdings for $300,000 a year since 2011.

Last year, Townsend was paid an additional $75,000 to provide advice on MassPRIM’s timber investments, director of communications Eric Convey told Agri Investor in October.

According to a report from MassPRIM’s evaluation committee, which was included in materials from Monday’s meeting of the pension’s Real Estate and Timberland Committee, it received five proposals for the timber consulting contract.

Townsend, Callan and Real Asset Portfolio Management also submitted proposals for the contract, but fee details from unsuccessful bidders will only be available after the MassPRIM Board has voted to approve the recommendation of the Real Estate and Timber Committee, Convey told Agri Investor in an email Wednesday.

In its report detailing the results of the RFP review, the Committee recommended IWC as “the most qualified firm” to consult PRIM on its timber investments.

“IWC demonstrated a superior depth of knowledge, resources, experience and expertise in timberland investing,” the committee wrote. “Moreover, its sole focus on timberland investments is advantageous.”

IWC will be paid $100,000 for the first year of consulting  and $150,000 for each of the following two years, according to the meeting materials. The materials also showed that the other finalist in the search, Albourne America, proposed a higher fee of $240,000 for each year of the three year contract.

Founded in 1991, IWC oversees more than $3 billion in institutional timberland investments and maintains offices in Denmark, Australia and North Carolina.

The firm monitors more than five million acres of timberland across 85 properties in the US; 1.8 million acres across eight properties in Australia and New Zealand; six million acres across five properties in Europe; and 2.7 million acres in 35 emerging market countries.

Danish insurance company LB Forsikring owns a 44 percent stake in the firm, with IWC employees and board members owning the remaining majority stake.

MassPRIM’s timberland investments currently constitute 3.8 percent of overall assets and are held in accounts managed by Forest Investment Associates and The Campbell Group.

The pension began investing in timber in 2002 and over the past year, MassPRIM’s un-levered timber investments have produced 7 percent returns, 4.5 percent above the 2.6 percent NCRIEF index to which it is benchmarked.