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Timberland Investment Resources Europe lands $100m second close

Managing partner Gian Paolo Potsios says the firm has seen an increase in interest among institutional investors in the asset class due to the turmoil created by coronavirus.

Timberland Investment Resources Europe has reached the halfway point on its 2020 vintage $200 million fund, managing partner Gian Paolo Potsios confirmed to Agri Investor.

TIR Europe Forestry Fund II has secured $100 million in commitments from a range of investors made up of institutional investors, family offices and endowments. The firm has added two new investors of a similar profile since its $75 million first close in April.

Potsios said fundraising has been positively and negatively impacted by the coronavirus pandemic.

“There has definitely been a renewed interest in the asset class,” he said. “I’ve had several phone calls from investors – there has definitely been a revamp because, after all, there are not many asset classes that are able to give you annual cash returns of around 3-4 per cent and an IRR over time of around 8-10 percent, with a very low risk profile.”

The challenge, said Potsios, is the same one facing GPs everywhere – how to convert fresh interest from new investors into tangible commitments without a face-to-face meeting.

“From an investor’s perspective, before they give you $20, $30 or $40 million for the next 10-15 years, they want to come look at you, kick the tires and look at you in the eye and ascertain whether you’re a nice guy or not. If that personal connection will be more difficult to obtain – how do we get around it?”

The 10-year closed-ended TIR Europe Forestry Fund II has a $250 million hard-cap and will invest exclusively in the US across five-to-six properties with a range of tree species and age groups. Average acquisition values are expected to be in the $30 million-$50 million range.

TIR Europe is the successor to the 2017-vintage fund of the same name, which closed at $130 million and is now fully committed.