The Scottish financial investment firms are teaming up with the Brits to put more money into the global timberland investment market.
"Cambium, which is incorporated in Jersey, will invest in a diversified portfolio of timberland assets. The placing raised £104m from Scottish institutions and from investment funds like British Steel Pension Fund, Altimus, Midas Capital and AXA-Framlington. Cambium intends to invest the cash raised in a global portfolio of forestry-based properties and in forests that can be managed on a sustainable basis, McGrady said. Cambium is the first purely timberland investment vehicle to be hedged into sterling and designed specifically for British investors. Read more.
It seems like every day more money pours into the timberland market. Are we in the early stages of a developing "timberland bubble"? The positive market factors (beyond historical returns of timberland) include the political momentum for carbon sequestration and energy independence. The down side is a lot of money chancing a fairly finite land base. Another positive point is that if institutional investors have really accepted timberland as a separate asset class, there is still a HUGE amount of money to flow in that direction. As we are seeing from the Brits. And yesterday's Bank of America announcement. Temple-Inland should do quite well.