Postitive Dynamics for U.S. Timberland Investing
There could be as much as $10 billion of committed but as yet uninvested capital targeted at timberlands as an investment asset class, according to Reid Carter, Managing Partner, Brookfield Asset Management.
In this White Paper, Carter cites a recent Merrill Lynch survey that identified about $4 billion of potential net institutional capital inflows into timberlands within the next five years. This represents a 10%-11% increase on the $35-$40 billion currently invested in the timberland asset class -- and because of certain exclusions to the survey, Merrill Lynch acknowledged the estimate could be significantly understated.
This White Paper highlights the high investor interest in timberland, fueled in part by "excellent long-term risk-adjusted returns, generating both cash and capital returns." Even so, only about 0.3% of the approximately $60 trillion global wealth portfolio is believed to be directly or indirectly invested in timber.
Timberlands represent a positive addition to an investment portfolio, having a weak correlation with other major asset classes and a negative correlation to real estate and commodity indices.