Introduction to Timberland Investing

Timberland investment offers many attractive benefits to institutional investors including portfolio diversification (low volatility and correlation to other major asset classes), attractive risk/return profile, serving as inflation hedge and a solid cash flow potential. The renewable nature of this asset class and its positive role in carbon sequestration provide good investment opportunities for those investors that place socially responsible investment (SRI) and mitigation of climate change high on their agendas.  

Institutional timberland investment is spreading from the United States to Europe, Latin America and Asia, and even Africa. At the same time the underlying markets are quickly diversifying to encompass bioenergy and environmental services in addition to timber, thus creating new, attractive investment opportunities.

Below you will find recent presentations and research by the Dasos Team and others providing detailed information on the inherent features of timberland as an asset class, global and regional prospects for timberland investing, emergence of new demand drivers, etc. Together they answer to the question: Why timberland has an important role to play especially in institutional investment portfolios?   

 

 
 
 
 
 
 
 
 
 
 
 
 

Other Research

Binkley, C., Washburn, C. and Aronow, M.E. 2001. “Timberland as a Portfolio Diversifier”.

Carroll, B. 2003. “Applying Modern Portfolio Theory to Timberland Allocation”.

Lacy, P. 2006. “Forest investment: the emergence of timberland as an asset class”.

Lausti, A. 2004. ”The inflation-hedging characteristics of forest ownership, private housing and stocks in Finland”.

Lutz, J. 2007. “Inflation and Timberland Returns”.

Lutz, J. 2004. “The Anti-Correlation Heresy. Timberland is negatively correlated with stocks – or is it?”.

Mercer. 2011. “Climate Change Scenarios – Implications for Strategic Asset Allocation”.

Mercer, 2006. “Timberland as an investment for institutional portfolios”.

NCREIF. Timberland Returns. http://www.ncreif.org/timberland-returns.aspx

Scholtens, B. & Spierdijky, L. 2008. “The Diversification Properties of US Timberland: A Mean-Variance Approach”.