Alternative Asset Analysis (AAA) said that news of a CA$1 billion takeover offer from two pension funds to take over Canada-based TimberWest Forest Corp, reflects a growing appetite for investment in the global forestry industry.
Online PR News – 03-May-2011 – – Boston, MA, May 02, 2011 -- The Public Sector Pension Investment Board and the British Columbia Investment Management Corp. have joined forces to make the CA$1 billion offer for the firm. This news follows earlier reports this week of pension funds in Japan seeking to invest more heavily in alternative assets, such as private equity and forestry, to diversity risk in their portfolios, explained AAA – a US-based alternative investment advocacy and analysis group.
Things are looking so good for the industry in Canada that TimberWest is now hoping to solicit several more bids from interested parties. “TimberWest knows it’s on to a good thing and will most likely be hoping that a bidding war may emerge as prospective investors hope to grab a slice of a promising alternative asset class” explained Anthony Johnson, one of AAA’s partners.
Growing exports of Canadian timber to China and Japan have largely fuelled the recovery of the sector, which suffered so badly as a result of the housing slump in the US. Now, after years of depressed sales and investment, things are really looking up for global forestry and on a global scale. This includes emerging markets like Brazil where plantation management firms like Greenwood Management are taking advantage of the growing demand for sustainably produced timber and coal from non-indigenous species, such as Teak and Eucalyptus.
TimberWest is attractive to investors intent on buying up forestry assets, but also to those who are keen to buy land as it owns the land and trees themselves, making it one of the largest landowners in the Vancouver region. This means is differs vastly from the majority of Canadian forestry firms, which lease the land on which they grow their crops from the Crown. “This makes other forestry firms in Canada slightly less attractive to investors who like to have tangible assets during these uncertain times,” explained Johnson, an analyst and former fund manager.
Pension funds are often interested in forestry investment as they have a long-term investment style and are in the position where they can afford to sit back and watch their assets literally grow. Anyone in a similar position would be wise to invest in trees, explained Johnson, who, along with AAA, encourages investment in sustainable, ethical projects around the world.
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