By Simon Jessop
LONDON (Reuters) -Stafford Capital Partners has raised $1.1 billion for one of the world’s biggest timber funds, beating its original target, its chief executive said, as institutional investors, especially in Europe, seek climate-friendly ways to diversify their holdings.
Angus Whiteley told Reuters the Stafford International Timberland Fund X, which focuses on the secondaries market, raised $1.04 billion and secured a further $100 million in co-investment.
Whiteley said the secondaries market, which trades stakes in assets primary investors have previously bought, can offer higher returns of around 8% compared with traditional timber funds that may target 5%-6% returns.
“The secondary market is one that’s not heavily populated with many players… so for a motivated seller, we get the opportunity to buy it (the stake) at a reasonable discount,” Whiteley said.
The increased returns had “attracted more money into the asset class”, he added.
Nearly three-quarters of the 13 institutions to commit to the new fund had also invested in Stafford’s ninth fund, and most were pension schemes, alongside an insurance company and an investment trust.
Around half of the commitments, 48%, were from investors based in Britain, with 23% from Germany, 19% from South Korea and 10% from North America, Stafford said.
The fund has already committed $330 million across five investments with a combined size of 1 million hectares, and expects to complete a further $140 million deal soon, he said.
Across its entire portfolio, Stafford holds an interest in 127 assets covering 6.4 million acres of forest that is collectively locking away 16 million metric tons a year of carbon emissions.
(Editing by Barbara Lewis)
