Research

Research plays a crucial role in all phases of our investment process from acquisitions to dispositions.

In-house and collaborative research underlies nearly all of our investment decisions. We write and produce several research documents on a regular basis. These publications are used to educate potential investors, while keeping our current clients informed of topics that may be relevant to their portfolio.

All of our in-house research publications are now accessible to the public.

Timberland Investor Archive

2012 Q4: 2012 Timberland Performance

Timberland property values experienced stronger gains this year as appraisers gave credit to strengthening timberland fundamentals, improved transaction flow and rising transaction prices. As in prior years, we devote our fourth quarter issue of the Hancock Timberland Investor to a review of this year’s investment performance of private timberland.

Timberland Investor Archive

2012 Q3: Welcome to the expanded geographic coverage of the Hancock Timberland Investor Newsletter

The Hancock Timberland Investor (HTI) newsletter has been published since 2000, always including a set of reoccurring charts monitoring timber and timberland markets, tracking costs, prices, demand
drivers, and returns.

Timberland Investor Archive

2012 Q2: Will the current rally in North American lumber and plywood prices set the state for improving timber values?

The strong pricing in 2012 for lumber and wood panels raises expectations for improved timber pricing in the remainder of this year and into 2013. North American softwood lumber and wood panel prices beat expectations this year with exceptionally strong performance. In the first 8 months of 2012, the Random Lengths Composite Index for North American softwood lumber averaged $338 per mbf, 27 percent above the same period in 2011. Softwood lumber prices this year sustained the strongest price performance since 2006.

Timberland Investor Archive

2012 Q1: Timberland Portfolio Allocation and the Mean-Conditional Value at Risk

Mixed asset portfolio optimization using mean-conditional value at risk as opposed to the traditional mean-variance approach continues to result in favorable portfolio allocations to timberland. The mean-variance portfolio optimization methodology introduced by Harry Markowitz (1952) has been extensively used by investment managers to assess performance of diverse asset classes. We have utilized efficient frontiers and risk-return plots to compare timberland performance to other assets for over 20 years. However, the theory of optimal asset allocation has advanced considerably and new methods have been developed to address some of the deficiencies of the mean-variance approach.

Timberland Investor Archive

2011 Q4: U.S. Timberland Performance in 2011

Private timberland performance in the U.S. ended the year with regional investment returns moving in opposite directions. The Pacific Coast states were busy supplying Chinese markets with logs and lumber, pushing up prices for both domestic and export logs in the region. Timberland owners in the U.S. South meanwhile, faced historically low timber prices and meager demand from wood product manufacturing facilities as a result of dismal U.S. construction demand.

Timberland Investor Archive

2011 Q3: Country Risk Analysis in Timberland Investments

Developing a structured framework for assessing risk factors is an important first step to successful global timberland investing. Timberland investing on a global scale can offer attractive alternatives for investors seeking diversification beyond the opportunities available within the domestic investment universe. As is typically the case in investing, however, higher returns come with added risks. And while geographic or country-specific conditions can positively impact investments, they can also lead to income volatility and principal losses.

Timberland Investor Archive

2011 Q4: Casualty Losses in Timberland Investments

The risk of catastrophic losses in timberland portfolios can be effectively mitigated with active forest management and portfolio diversification. Timberland properties occasionally suffer casualty losses from natural events such as fire, storms, and insect and disease outbreaks. In a 2010 Hancock Timber Research Brief, we discussed the risk of large scale losses in timberland investments caused by natural events in North America. In this issue of the Hancock Timberland Investor, we examine catastrophic losses on a global timberland portfolio and discuss available risk and loss mitigation strategies.

Timberland Investor Archive

2010 Q4: U.S. Timberland Performance in 2010

As timberland managers adjusted harvest plans in response to Chinese demand for wood products, 2010 cash yields for U.S. timberland properties in the NCREIF database nearly doubled from their 2009 results. With the year 2010 behind us, we devote the fourth quarter issue of the Hancock Timberland Investor to our regular year-end review of investment performance of U.S. private timberland properties. Our measure of timberland performance is the NCREIF (National Council of Real Estate Investment Fiduciaries) Timberland Property Index, which reports returns for institutional investments in timberland properties throughout the United States.

Timberland Investor Archive

2010 Q3: Timberland can be a Useful Addition to a Portfolio of Real Assets

Real assets, such as timberland or real estate, share several fundamental investment characteristics that attract investors. Among these are strong risk-adjusted total returns, the potential for relatively high cash yields, and the capacity to improve the risk-efficiency of a typical mixed asset portfolio comprised of stocks and bonds.

Timberland Investor Archive

2010 Q2: Harvest Deferrals, Growing Inventory, and Future Stumpage Price Trends

The current economic downturn has led many timberland managers to defer planned harvests in expectation of price recovery, resulting in an increase in the volume of timber stored on the stump. However, the impact of the deferred harvests on future stumpage prices may prove difficult to forecast. The economic downturn that began in 2007 has produced some of the lowest timber price levels since the times of the Great Depression. Timberland managers throughout the United States have responded by reducing timber harvest levels.

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