Gresham House Forestry Fund LP

A Product of Gresham House Forestry

The Gresham House Forestry Fund LP seeks to deliver asset backed growth and income to investors, targeting long term returns of 10.0% per annum net over the life of the fund, which are subject to significant tax benefits. The fund is now closed to new investment. To invest in Forestry please contact the Forestry team.

*This is a target only and not a profit forecast. There can be no assurance that this target will be met or that the Fund will make any distribution at all. This target return should not be taken as an indication of the Fund’s expected or actual future results. Potential investors should decide for themselves whether or not the return is reasonable and achievable in deciding whether to invest in the Fund.

Investment Approach

The Gresham House Forestry Fund LP seeks to deliver asset backed growth and income to investors, targeting long term returns of 10.0% per annum net over the life of the fund, which are subject to significant tax benefits.*

This will be achieved through:

  • Sourcing and appraising UK commercial forestry of diverse ages and locations and acquiring it for the Fund
  • Building a diversified portfolio of forests aimed at capital growth and income
  • Biological growth of the trees
  • Targeting 2.0-4.0% of NAV* annual distribution from property and higher and better use, but predominantly from timber harvesting, subject to the Investment Manager’s discretion**
  • Potential for recovery in real timber prices as UK timber supply declines
  • Higher and better use (“HBU”) of the land (windfarms, property development etc.)
  • Experienced forestry management and expert silvicultural practice.

The fund has invested in prime, diversified, large scale UK commercial forestry and offers Limited Partners ownership of an unlisted timber investment, which is lowly correlated to traditional asset classes and should not be subject to the price volatility associated with such investments. UK commercial forestry has historically been positively linked to gold and inflation, providing a long-term store of value.

*This is a target only and not a profit forecast. There can be no assurance that this target will be met or that the Fund will make any distribution at all. This target return should not be taken as an indication of the Fund’s expected or actual future results. Potential investors should decide for themselves whether or not the return is reasonable and achievable in deciding whether to invest in the Fund. Gresham House does not offer tax advice.

**Timber income distributions may commence from the 2nd anniversary of the Final Closing Date, or earlier, both at the Investment Manager’s discretion. This is a target only and not a profit forecast. There can be no assurance that this target will be met or that the Fund will make any distribution at all. This target return should not be taken as an indication of the Fund’s expected or actual future results. Potential investors should decide for themselves whether or not the return is reasonable and achievable in deciding whether to invest in the Fund.

The Forestry Investment and Asset Management Process

The focus of commercial forestry in the UK is on growing softwood conifers, in particular Sitka spruce; this main productive species is grown to be felled on a 35-40-year cycle.

All investments for clients start with an in-house sourcing and appraisal of possible assets for acquisition, which is carried out by the investment team. Investments on the open market are often sourced through selling agents; however, an extensive network of contacts in the industry have historically allowed multiple large-scale opportunities to be developed off-market. This is done through a combination of pro-active pursuit of acquisitions, owners and professional third parties indicating a desire to sell and offering the asset and direct introductions. The 180 years of combined experience amongst the team provides a wealth of industry knowledge and networks from which to source prime commercial forestry for investors.

Once identified, the investment team produce a full investment appraisal on the asset.

The Sourcing and Appraisal Process

 

1) Acquisitions

  • Sourcing both on and off market transactions for clients
  • Appraising and valuing forests with technical onsite, and desktop due diligence
  • Identification and analysis of potential HBU opportunities
  • Investment Committee consideration of proposed deals
  • Purchase and support during the legal transaction

2) Strong management of third party forestry service providers

  • Disciplined control of costs
  • Quarterly budgeting and reporting
  • Maximising biological growth and asset potential
  • Achieving the best prices for timber at harvesting
  • Alignment of interests with clients, fees commensurate with client’s returns
  • Independent third-party valuations.

3) Utilisation of Our Extensive Network

  • Breadth of relationships with on-site forestry specialists and timber buyers
  • Support and advice during any disposal process.

4) Exploration of Higher and Better Use (“HBU”) Opportunities

  • Systematic reviews to capitalise on any opportunities
  • Track record of identifying and delivering wind farm projects, small scale hydro opportunities, property developments.

5) Risk Management

  • Identify and manage physical risks
  • Insure against fire and storm damage, where appropriate
  • Management and mitigation of uninsured risks such as pests and disease
  • Building diversified portfolios of forests across age classes and geographical regions.

6) Long Term Asset Management

  • Focusing on increasing and preserving the capital value of the asset
  • Focusing on sustainability.

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How to Invest

The Gresham House Forestry Fund LP is now closed to new investment. To invest in Forestry, please contact the Forestry team.