Home About Timberland Agriculture Sustainability Publications Contact us Services & Investment Solutions IWC provides a full range of timberland investment related services from investment strategy to portfolio construction, due diligence, performance review, and strategic advice during the investment lifetime. Below is a non-exhaustive list of our services. IWC also offers a multi-manager turn-key investment solution via its IWC Timberland Partners funds. To know more about this product, please contact Henrik Lundqvist, Chief Operating Officer. Investment Process INVESTMENT STRATEGY FORMULATION IWC’s views on the outlook for timberland investments across regions, species, and forest regimes are considered when developing a timberland strategy in combination with investors’ specific investment policy and goals. INVESTMENT IDEAS GENERATION DUE DILIGENCE INVESTMENT COMMITTEE (IC) PORTFOLIO CONSTRUCTION PORTFOLIO MANAGEMENT Why Timberland? Private timberland is typically grouped into real asset or alternative allocations intended for generating attractive returns from income and appreciation, provide portfolio diversification, and some inflation protection over the long term. Attractive risk-adjusted returns – biological growth and harvest flexibility contribute to the historically attractive risk-adjusted returns generated by private timberland when compared to other asset classes. Low correlations and inflation hedge – timberland has historically had low correlations with other asset classes and a strong correlation to inflation. Land acts as a value preserver over time and real timber prices respond to economic demand and end price increases Sustainability, a complement – managed sustainably, the timberland asset class counteracts deforestation of natural forests, relieves environmental and social pressures, and provides valuable amenities (carbon sequestration, biodiversity preservation, floods, and other extreme climate events, mitigation, the protection of local communities’ livelihood, etc.). Therefore, sustainable forestry is increasingly being recognized, from the responsible investment community, as a multi-faceted impact strategy. For more information, please visit our Sustainability page. Return Drivers Biological growth – separates timberland from other types of investments, including property, and it is estimated to be the most important return driver. The effect from biological growth on return is two-dimensional. Not only do trees grow in volume, but as they grow, they also turn into higher value products (called “ingrowth”). The resulting extra volume and consequent value change over time are, to a large extent, independent of macroeconomic or financial market conditions (“trees do not read the Financial Times”). The figure on the right side illustrates how the biological growth of pine trees not only provides additional volume, but also higher valued products as the trees mature. Timber prices – numerous macroeconomic factors influence the price of timber, including population growth, GDP per capita, activity in the construction sector, interest rates, and the overall level of economic activity. Moreover, micro factors such as environmental/legacy issues and local mill capacity can affect the stumpage price within regions. It is important to note that during periods of declining timber prices, some flexibility exists when it comes to timing the harvesting of trees as they can stand on the stumps. Land values – historically, land value only represents a small percentage of the total timberland investment value. Land values are related to local supply and demand conditions as well as quality and therefore vary significantly. Nevertheless, increasing competition for land to be used for agriculture, bioenergy production or recreational use, as well as for forestry, can provide upside potential based on land appreciation. Amalievej 20 1875 Frederiksberg C Denmark Contact us Cookie policy Disclaimer