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.

Current

August 2017, Hancock Timber Research Brief: Mitigate the Risk of Catastrophic Loss with Active Forest Management and Portfolio

Twenty-six years of historical loss data indicate that the risk of a catastrophic loss for a timberland portfolio is low, at 0.11 percent per year on average of total global assets under management (AUM). Fire damage has been the leading cause of loss at just over 0.06 percent per year on average of total global AUM, followed by damage from storms, at nearly 0.05 percent.* Losses caused by natural events can be effectively mitigated with active forest management and portfolio diversification, while total revenue losses can be reduced with timber salvage operations.

Current

2017 Q1, Hancock Timberland Investor: New Trade Restrictions on Canadian Softwood Lumber: Positive Support for U.S. Timberland Values, but Not a Game Changer

New duties and a potentially more restrictive long-term trade agreement on Canadian softwood lumber will support higher lumber prices and boost the market share of U.S. softwood lumber mills, but the potential positive impacts for U.S. timberland owners will be restrained. The expected boost in U.S. sawtimber demand tied to changes in trade policy is likely to be moderated by increasing imports of softwood lumber from non-Canadian suppliers. The benefits of the duties to U.S. timberland owners will be most pronounced in the U.S. West Coast, where higher lumber prices will more directly translate into increased sawtimber values.

Current

2016 Q4, Hancock Timberland Investor: 2016 Timberland Investment Performance

U.S. private timberland investments returned 2.59 percent in 2016, consisting almost entirely of income, as capital appreciation made little contribution. As in prior years, we devote our fourth quarter issue of the Hancock Timberland Investor to a review of investment performance of U.S. private timberland properties. The highest profile measure of timberland property performance in the U.S. is the NCREIF (National Council of Real Estate Investment Fiduciaries) Timberland Property Index, which reports returns for institutional investments throughout the United States.

Current

2016 Q3, Hancock Timberland Investor: Timber and Timberland Markets – Post Election 2016

The policy goals and priorities of the Trump Administration are slowly coming into focus following Donald Trump’s upset win of the Presidency and the Republican’s holding onto majorities in both chambers of Congress. President elect Trump’s statements to date on the policy agenda for his first 100 days have opened a window onto where his more immediate efforts will be focused, and four areas clearly have the potential to directly impact on North American timber markets:

– Economic Growth
– Financial Sector Regulation
– Trade
– Immigration

Current

November 2016, Research Brief: Timber Markets – Post Election 2016

The policy goals and priorities of the Trump Administration are slowly coming into focus following Donald Trump’s upset win of the Presidency and the Republican’s holding onto majorities in both chambers of Congress. President elect Trump’s limited statements to date on the policy agenda for his first 100 days have opened a small window onto where his more immediate efforts will be focused, and four areas clearly have the potential to directly impact on North American timber markets:
1. Economic Growth
2. Financial Sector Regulation
3. Trade
4. Immigration

Current

2016 Q2, Hancock Timberland Investor: Timberland and Farmland: Working Together in a Mixed Asset Portfolio

Timberland and farmland assets have been used and tracked as components of institutional portfolios for over two decades, providing historically strong performance, low to moderate risk, and favorable diversification characteristics. In general, timberland and farmland have been managed separately and not in an integrated fashion. Yet, both timberland and farmland are income generating and land appreciation investment vehicles with biological growth components, offering comparable risk-adjusted returns and inflation protection. Evaluating and structuring coordinated investments in these two natural resources has the potential of generating operational efficiencies and augmenting the risk-reducing diversification of a broader portfolio. This article provides a comparison of the risk-return profile of a combined timberland/farmland vehicle together with commercial real estate and other financial assets. Further, we compare performance results over the past twenty-five years for pure timberland and pure farmland to a pro-forma combined timberland/farmland vehicle.

Current

2016 Q1, Hancock Timberland Investor: U.S. Housing: The Case for Strong Demographically Driven Housing Demand

New home construction and repairs and alterations on existing homes provide the largest end-use markets for the lumber and wood panels produced from North America’s commercially managed forests. Consequently, trends in U.S. housing markets are a crucial factor in estimating future demand for timber, and projecting timber prices and timberland values. Residential construction activity is responsive to a variety of factors, including: population demographics, (size, growth, age-composition and geographic distribution of the population); regional economics (employment, income and credit availability); and culture (societal norms associated with forming separate households, marrying and starting a family). Changes in demographic and cultural patterns tend to shift relatively slowly over time, but economic factors can inject sudden and dramatic dislocations into housing markets, and this has definitely been the case over the past decade.

Current

March 2016: U.S. Southern Timber Markets – Key Trends

Keith Balter, Hancock Natural Resource Group’s Director of Economic Research discusses the key trends in U.S. southern timber markets.

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