Timberland Investment Resources secures $75m first close

Forestry asset manager Timberland Investment Resources Europe has had a $75 million first close on its $200 million forestry fund.

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

The 10-year closed-ended 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, TIR managing partner GianPaolo Potsios confirmed to Agri Investor.

“We buy properties in the $30 million-$50 million range,” he said. “We buy around 40,000 acres at a time. We call it the middle market, so not very small assets, although we do occasionally buy in this range if there is something particularly interesting.”

He added that the fund is edging towards making its first investment – a $30 million property in the south-east US.

Potsios didn’t disclose the names of any LPs that had committed to the fund, but did say investors are made up of six institutions evenly spread across pension funds, insurance firms and family offices.

The managing partner said capital raising during the coronavirus crisis has “basically stopped,” but he is working to help investors who are already working through due diligence with TIR.

“In terms of new LPs and everything else, everyone is basically confined at home and if they’re not confined, they’re not taking meetings so we’re slowing down,” Potsios said.

TIR does not expect any impact from covid-19 between “now and the end of the year,” he added, as logging has been deemed an essential business by the White House and if trees don’t need cut, they can be left to continue growing without any adverse impact on their value.

An extended crisis would be more concerning, said Potsios, as it would begin to negatively impact land and property values, bringing down the value of the firm’s assets and existing portfolio.

“But as I said, our asset class is for investors looking out 10-12 years,” he added. “In this particular fund, fund number one is now two years in, so they have eight more years to go. There is a general consensus that in the next year or so, the covid-19 crises will either become part of our normality or it will be resolved with some kind of treatment.”