Nuveen global timberland fund makes first acquisition

The open-end strategy was launched in November and has a capital raising target of at least $1bn, head of timberland investments Chris Lipton confirms to Agri Investor.

Nuveen Natural Capital’s Global Timberland strategy has deployed capital for the first time, acquiring properties from Green Crow Companies in Washington and Oregon, totaling 47,751 acres of timberland.

The open-end fund was launched in November and has a target of between $1 billion and $1.5 billion, NNC head of timberland investments Chris Lipton confirmed to Agri Investor.

NNC’s timberland vehicle was seeded with a fully mature 60,500-acre pine timberland property in the US Carolinas, which has been owned by TIAA for more than 20 years. TIAA also contributed $55 million in equity to the strategy.

The vehicle will target a net total return of 5-7 percent per annum from the sale of timber, land sales, carbon offsets, conservation easements and the appreciation of the assets, with a targeted 2-3 percent per annum cash yield.

The properties acquired from Green Crow Companies are populated with mixed conifer, primarily Western Hemlock and Douglas-fir.

The assets main source of income was derived from timber harvest during Green Crow’s ownership and did not produce any carbon credits that were traded in compliance or voluntary markets.

Nuveen expects timber harvest to continue to be the main source of revenue it derives from the assets.

“The strategy seeks to generate returns from the operating income, the sale of timber and the capital appreciation of timberland from investments in core strategies and geographies,” Lipton told Agri Investor.

In some cases, the strategy may also seek income from payments for ecosystem services and other land-based assets. While the fund is targeting roughly 30 percent of the assets focused on nature-based solutions and 70 percent focused on sustainable timberland management, the allocation of return from each strategy will be dependent on the assets acquired on behalf of the fund.

The global timberland fund targets forestry assets in Australia, Canada, Chile, New Zealand Uruguay and the US.