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Program

Tuesday, May 1, 2018

Day One

7:50am

Registration

**The Convene Conference Center is located in the TIAA-CREF building located at 730 Third Ave.   A valid ID is required to enter the building.   Please allow an extra few minutes to obtain your pass to the building. 

8:50am

Jon Rager

Senior Vice President, Analytics

RISI

Welcome Remarks

9:00am

A New Entrant into Timberland Investment

The Rohatyn Group (TRG) is a specialized asset management firm founded in 2002 with presence in 18 cities around the world and capabilities across private equity & credit, forestry & agriculture, infrastructure & renewable energy and public markets. While the company’s focus is on emerging markets, in 2017 it acquired GMO Renewable Resources, a leading manager of global investments in timberland and agriculture. TRG believes that “Powerful secular dynamics, including growth of the middle class, increasing urbanization, and access to sustainable resources, underpin opportunities in emerging markets as well as forestry and agriculture.”

9:30am

Balancing Agriculture vs. Forestry in an Investment Portfolio

Discussion will take a comparative view of farmland and timberland investment strategies, assessing risks/returns and opportunities.

10:00am

Mike Clutter

Vice President and Director of U.S. Investments and Operations

Forest Investment Associates

North American Timberland Investments: How Will TIMOs Prosper?

This presentation will focus on (1) the current structure of the TIMO space in North America, (2) recent history and expectations looking forward, and (3) a few observations about private placement versus public timberland investments.

10:30am

Coffee and Tea Networking Break

11:00am

Dave Rumker

Managing Director and Chief Investment Officer

Campbell Global

Is it Time for TIMOs to Start Moving Back into the Old-Style FP Company "Vertical Integration" Model?

Vertically-integrated ownership of timberlands and forest products manufacturing can add substantial value for institutional investors, but under what set of circumstances?  This presentation will highlight key strategic considerations, using a Campbell Global case study.

11:30am

Erin Robert

Head of Capital Strategies, Sustainable Finance Team

JP Morgan Chase

Conservation Investments and Institutional Investors

Sustainable investments represent a growing percentage of total global assets under management. This investor universe is hungry for assets that advance environmental and social initiatives. What are the opportunities for the forestry industry to tap this investor base?

12:00pm

Andriy Hrytsyuk

Portfolio Manager Forestry

IKEA Group Financial Asset Management

IKEA Group Financial Asset Management Investments in Timberlands

The presentation will introduce IKEA Group investments into forestland, which is part of the Financial Asset Management.

12:30pm

Networking Lunch

1:30pm

Family Offices and Timberland Investment

The presentation will review the timberland investment strategies for Family Offices investors.

2:00pm

Panelists

Trends in European Timberland Investments

Looking at Europe from a South American perspective puts the differences in risk reward in a new perspective, issues for discussion are:

  • Does it make money?  The value chain from seedling to delivered wood to customer
  • Beware of things that bug you.  Biological and climate risks, legislative risk, ownership restrictions, regulatory quagmires and taxes
  • A tree in the hand is worth two in the forest.  Supply and demand for wood.  Existing vs new plantations and how does environmental legislation affect future supply
  • Is size everything?  Scale, growth rate, transport, management intensity and their costs.  What is a breakeven MAI?

 

2:30pm

Alternative Investment Possibilities for Timberlands in Asia

Plantation investments in Asia have been traditionally focused on supplying demands of the pulp industry. Declining natural forest supplies in combination with strong demand however is creating alternate investment possibilities for solidwood plantations for sawntimber & plywood in the region.

The presentation will address:

  • What are the key demand drivers in Asian solidwood end markets?
  • Which plantation species (including rubberwood) and countries present opportunities for investors?
  • What are some of the most important considerations for investors into Asian Timberland?

 

 

3:00pm

Coffee and Tea Networking Break

3:30pm

Chip Dillon

Wall Street Analyst

Vertical Research Partners

REITs Today: The Challenges and Opportunities

The publicly-traded US timber REITs have returned 50%-100% over the past two years, besting the performance of the major indexes. We believe the early 2016 lows represented a mis-pricing anomaly emanating from the brief, though intense, US commodity deflation fear of that period. We say “anomaly” given the generally-positive response seen in timber REIT valuations in response to lower inflation and longer-term interest rates seen in the era of the US timber REIT that began in 1999. Despite the increase in longer-term interest rates over the past year, the timber REIT stocks have continued to perform well as investors focus has shifted to shorter-term factors. Further intermediate-term gains from here will largely be a function of M&A developments, investor perception of performance, changes in long-term interest rates, and demand growth for wood fiber. 

4:00pm

Henry Lin

CEO and Managing Director

China Forestry Group, New Zealand

An Integrated Approach to Securing China’s Future Timber Supply

China Forestry Group Corporation (CFGC) was established in 1996 and started operating in 2001 under the State Forestry Administration.  It is the commercial arm of the Chinese Government forestry department.

Since 2013, China National Forest Products (as a subsidiary of CFGC) commenced international investment in forests and logistics solutions to support global sourcing of logs and lumber. 

The focus of this presentation is to highlight a new paradigm for global forest investors: increasing focus on the China market and associated supply chains as a primary reason for forestry investments.

The presentation will also include a discussion of the relative China market benefits of supply from the Pacific North West, USA South East, Uruguay/Brazil and Australia-New Zealand.

4:30pm

Outlook for Timberland Investments in New Zealand and Australia

  • After USA, Oceania (Australia + New Zealand) has been the most popular TIMO timberland investment haven – with TIMOs New Forests, Hancock, GFP, Campbell Global, GMO RR (now Rohatyn Group) and RMS all invested, as well as Canadian pension fund PSP
  • Domestic and export pulpwood (in Australia) and sawlog (both countries) markets are all strong; and with woodchip export prices set to reach record levels in Australia in 2018
  • Australian Government policy has always been strongly pro-overseas investment, while New Zealand policy has been mixed, although mostly supportive; but -
  • - A new NZ government is in 2018 thinking about seriously hobbling future opportunities for overseas investment in trees.  But will it “take the plunge”?  
5:00pm

Conference Day One Close

5:00pm

Cocktail Reception

Wednesday, May 2, 2018

Day Two

7:50am

Registration

**The Convene Conference Center is located in the TIAA-CREF building located at 730 Third Ave.   A valid ID is required to enter the building.   Please allow an extra few minutes to obtain your pass to the building. 

8:45am

An Update on Brazilian Forest Industry and Summary of Recent Important Changes for the Forestry and Pulp Investment Sectors

9:00am

Timberland Investments in Environmental Markets: Forests as a Climate Solution?

Since the Paris agreement in 2015, forests and land use have emerged as a key policy area related to action on climate change, second only to the transition to renewable energy and electrification.  The presentation will review the background to forest and land use climate policy and how this will provide growing opportunities for forestry investors.

 

9:30am

Teak Investment in Latin America

10:00am

Creating Value in Forestry Assets in Sub-Saharan Africa

With a very favorable demand-supply trajectory for wood and forest products, Sub-Saharan Africa has the capacity to absorb significantly more capital than has historically been invested in the region.  

Real and perceived African risks and poor historical results from greenfield investments may explain why there have been limited investments by institutional investors in the region.

Does this “buyers’ market” condition for African timberland assets create a compelling opportunity? If so, how?  With reduced return expectations for timber investors globally, should Africa be part of the global timberland portfolio?

This presentation will discuss CAP’s “contrarian” investment approach in Africa, and provide specific examples and results.  Topics to be addressed include:

• CAP’s investment strategies to take advantage of African market fundamentals and inefficiencies while being committed to commercial, environmental, and social sustainability

• Value creation opportunities in Africa and parallels to historical TIMO return drivers

• Key success factors for timberland investors in Africa

10:30am

Coffee and Tea Networking Break

11:00am

Panelists

Investment Opportunities in Latin America

Our speakers will discuss institutional investment in timberland in Latin America by focusing on their experiences in Argentina, Uruguay, Colombia and Central America.

11:40am

Natural Capital and Impact Investing: A Real Assets Perspective

Data is emerging to demonstrate that monetizing natural capital can meaningfully enhance returns on real assets, and meet the growing demand for so-called “impact investment” products. Encourage has been operating in the natural capital markets for more than a decade, touching on the markets for mitigation and conservation banking, water, and carbon by working with TIMO’s and other landowners to realize value from ecosystem services. This presentation will provide an overview of natural capital markets and share some specific examples for how timber owners especially can benefit from California’s regulated market for carbon credits.

 

12:05pm

Sustainable Forestry in Ireland

Ireland is emerging as a new destination for forestry investment. At the same time, Continuous Cover Forestry is being increasingly embraced as a commercially viable alternative to clearfell-replant systems, with many environmental benefits. The presentation will explore this geography and management approach, in the context of a new sustainable forestry fund that has been established in Ireland with the backing of institutional investors.  

12:20pm

Networking Lunch

1:30pm

Bret Vicary

Vice President Forestry & Natural Resource Consulting

Sewall

Expectations on Return Premiums for Timberland Investments: USA and Global, and Trends in Last Decade Outside of the USA

Bret Vicary, VP of Sewall on its Investor Survey results for acquisition IRR premia vs. US timber investments, for more than 40 country/region/species options. 

2:00pm

Global Pulp and Paper Market Outlook

Growth in world paper demand is accelerating along with the general economies. Packaging and tissue continue to lead the upswing while graphic papers are still declining, albeit less rapidly. Pulp usage is being boosted by tightening environmental policies in China.

 

2:30pm

North American Timber: Predicting a Depression Echo

Markets are cyclical. In August 2017, the Financial Times posted an article highlighting RISI's claim that the long-term outlook for the timber asset class is positive, introducing what RISI refers to as a potential "depression echo." We start by highlighting that the depression in US solid wood product demand and the consequent low pricing for timber in some producing regions has never been so deep for so long. We postulate that this unique market cycle will have distinctive consequences in the future which includes a potential timber shortage over the long-term. In this presentation, we will demonstrate how the seeds are already being sown for sawlog prices to eventually return to inspiring levels for the timber asset class.

 

3:00pm

Coffee and Tea Networking Break

3:30pm

Outlook for US Housing, Lumber and Wood Panels: US Housing Gains and the Impact on the North American Wood Products Market

The recovery in the US housing market has been restrained in the last few years, but indicators point to greater growth ahead. The strongest evidence yet that housing is ready for higher construction levels is the complete absence of excess inventory. Shelter prices are rising rapidly as a result and vacancy rates are hovering near historic lows. Meanwhile, household formations have only recently approached their historic trend, leaving pent-up demand for shelter at extraordinarily high levels. The main obstacle to higher construction levels continues to be supply side impediments, which should ease in response to stronger pricing and demand. The pace of the recovery in the US housing market will be a key determinant in the outlook for demand for softwood lumber and structural panels produced in the USA and Canada.

 

 

4:00pm

Bob Flynn

Director, International Timber

RISI

Key International Log and Woodchip Markets for Timberland Investor

China has been by far the world’s largest log import market, for both softwood and hardwood logs. However, the industry is changing rapidly, and President Xi’s agenda will drive further dramatic changes in China’s demand for imported logs and lumber in the decade ahead. This talk will summarize findings of a new RISI forecast on China’s timber import demand.

A number of pension funds and TIMOs have invested in forests where the woodchip export market represents an important component of financial returns. This talk will also highlight major changes coming in the important Asian woodchip import markets.

4:30pm

Conference Wrap-Up

4:35pm

Close of Conference