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TIAA-CREF launches $667m global timber company

TIAA-CREF and its subsidiary, GreenWood Resources, have launched Global Timber Resources. Investors include Swedish pension AP2 and the Greater Manchester Pension Fund.

TIAA-CREF and its subsidiary, GreenWood Resources, a global timber management company, have just closed Global Timber Resources (GTRCo), a new $667 million global timber company. GreenWood will manage the new company’s portfolio of timber assets.

Capital commitments come from several investors including the TIAA General Account and international institutions such as Caisse de dépôt et placement du Québec (Caisse), a power financial corporation, AP2 and the Greater Manchester Pension Fund, among others, according to TIAA-CREF.

GTRCo is a new entity designed to invest in timberland assets across North America, Latin America, Europe, and Asia. Emerging markets direct investment is one area highlighted by TIAA-CREF for the entity’s funding.

“We believe the macroeconomic fundamentals for timber investment are strong and see great potential for direct investment in emerging economies where we can benefit from low cost production and better proximity to growing demand,” Jose Minaya, senior managing director who heads private markets asset management at TIAA-CREF, said in a statement.

GTRCo will focus on the development and management of sustainable plantation forestry assets, according to a press release.

“Real assets are attractive to institutional investors, for both their diversification benefits and their ability to generate income,” John Panagakis, head of asset management business development for TIAA-CREF, said in a statement. “We are gratified to partner with and invest alongside like-minded institutions that share our long-term investment horizon and commitment to responsible investing.”

Jeff Nuss, president and chief executive of GreenWood said in a statement that he believes there are many compelling reasons to invest in a globally diversified portfolio of forestry assets. “We are honoured by the number of leading institutional investors who have made commitments to GTRCo […] and are very excited about the attractive new opportunities that we can bring to our investment partners.”

GreenWood manages about $950 million in assets for institutional investors, which includes the $667 million of capital committed to GTRCo. TIAA-CREF acquired majority ownership of GreenWood in 2012.

TIAA-CREF has been investing in timberland since 1998 and manages a portfolio of over $2 billion in timber assets around the world. Its $124 billion alternative investment platform focuses on real estate, farmland, timber, infrastructure, energy, private equity and commodities.

AP2, the Swedish pension fund, invested $750 million in TIAA-CREF Global Agriculture II last year in August. The fund raised $1.4 billion as of August 2014, with a target of $2 billion.