secondaries

Stafford’s successful takeover of a $259m timber fund suggests most investors value a guaranteed exit today more than higher promised gains tomorrow.

The secondaries firm expects to receive more acceptances of its hostile bid for the $259m timber vehicle after a majority of shareholders approved it last week.

Stafford Capital has lodged a $244m hostile bid for Phaunos, the timber fund it used to manage. By refusing to say what it thinks of it, the vehicle’s board may be gunning for a higher price.

Committing to a closed-end fund takes effort and time. So why would LPs ever want to exit a vehicle before the end of its term? We ask Stephen Addicott, a timberland partner at Stafford Capital Partners.

The global investment manager has already made one secondaries deal from its latest fund of funds in the strategy.

The firm's prior timber fund VII held a final close $84m above target last year, and is now 96% invested.

Agri and timberland saw the largest growth in transaction volume in secondaries last year, and now buyers are bracing themselves for a rise in opportunities.

China has overtaken Japan as Australia's main export market, driven by demand and competitive pricing.

Timber funds priced at 85% of NAV, down slightly from 2014, according to the Setter Capital report's author.

Stafford's latest timber fund has so far been invested most heavily in secondaries, followed by co-investments, said Tom Goodrich, a timber group partner.