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.


White Paper Archive

2014: Brazil Market Overview: Timber and Forest Products

The Brazilian economy experienced a major acceleration in its rate of growth in the 2000s. Between 2000 and 2012, real annual growth in Brazil’s GDP averaged 3.4%, up from an average rate of growth of 1.7% per year in the period 1990-1999. Other indicators of Brazil’s economic progress over the past decade include: the Brazilian unemployment rate dropping from 10% in 2005 to 5.5% in 2011; direct foreign investment in Brazil rising from an average of US$14 billion per year in 1991-2000 to US$57 billion per year in 2008-2012 (reaching a peak of US$76 billion in 2012).

White Paper Archive

2014: Chile Wood Markets Overview

Chile is one of South America’s most stable and prosperous nations, and has a leading position amongst Latin American nations in human development, competitiveness, income per capita and globalization. In the 2013 edition of their annual report, Economic Freedom of the World, the Cato Institute ranked Chile 11 out of 152 nations in economic freedom, behind Canada at 8 and ahead of the U.S. at 17.  In 2006, Chile moved into the position of having the highest nominal Gross Domestic Product (GDP) per capita in Latin America, and in 2010, Chile became the first South American country to join the Organization for Economic Co‐operation and Development (OECD).

White Paper Archive

2014 Q1: Brazil Eucalyptus Pulpwood Markets

Brazil’s Eucalyptus plantations prospered in the 2000s, as consumption of pulp and paper in Brazil grew and global markets for Eucalyptus pulp expanded. During this period, Brazil’s export volumes of Eucalyptus market pulp rose dramatically, and a new generation of world class Brazilian pulp mills were built. Between 2001 and 2011, production of pulp in Brazil nearly doubled, rising from 7.4 million tonnes to 14.3 million tonnes, and by 2012 Brazil accounted for 50% of global Eucalyptus pulp production.

White Paper Archive

2012: Timberland: The Natural Alternative

Currently, financial markets are characterized by unusually high levels of uncertainty; equity markets have moved close to their previous highs, while fixed income yields have dropped to historic lows. Currency markets are unsettled by the possibility of the disintegration of the Euro. Prospects for emerging markets have dimmed as Europe sinks into another recession and the U.S. economy fails to build forward momentum. Looking out over the coming decade, expectations of future earnings on traditional financial assets are being curbed, forcing investors to reconsider their return targets as well as their risk tolerance. In seeking some shelter in today’s turbulent investment landscape, timberland provides an attractive option.

White Paper Archive

2012: 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.

White Paper Archive

2012: Robust Analysis of Positive Outliers in the US Pacific Northwest Timberland Return

The timberland return series in the U.S. Pacific Northwest shows two periods of returns exceeding 60 percent per year. In both instances, the return outliers were caused by unusual, abrupt changes in government policy. In the mid 1970s, anti-inflationary measures by the Fed and optimistic timber demand forecasts by the Forest Service produced a bubble in the Douglas-fir stumpage markets. During the late 1980s and early 1990s, large tracts of public timberland were removed from available supply to protect the northern spotted owl. The reduction in the supply from public lands pushed up timber prices and returns to private timberland owners. With the outliers down-weighted or removed, returns in the U.S. Pacific Northwest are similar to the normally distributed returns in the adjacent British Columbia.

White Paper Archive

2011: Statistical Distributions of Timberland Returns

The mean-variance portfolio theory has been frequently employed by investors as an aid in the asset allocation process. However, a prudent application of the methodology requires that asset class returns be normally distributed. A growing body of empirical research has shown that the assumption of normally distributed returns is not satisfied by many asset classes, and reliance on the mean-variance methodology in such cases can lead to suboptimal asset allocation decisions. As an asset class, timberland is characterized by infrequent large scale transactions, and timberland returns are not readily observable by existing or prospective market participants. In this report, we analyze returns calculated with two methodologies: the NCREIF Timberland Index and the John Hancock Timber Index.

White Paper Archive

2010: Taking Advantage of the Wholesale Discount for Large Timberland Transactions, 2010 Update

The HTRG Research Report of February 2000 focused on the analysis of the wholesale discount for large timberland transactions. Since its publication, a large number of timberland properties have been traded. The goal of this brief is to analyze the impact of the transactions that occurred in the 2000-2010 time period on the magnitude of the wholesale discount.

White Paper Archive

2009: Timberland, A Natural Inflation Hedge

As we start to see an emergence out of the current global financial crisis, looking forward becomes an important yet daunting task. With central banks around the world utilizing monetary policy to combat the financial downturn, investors become mindful of potential future inflation. During uncertain financial times, seasoned investors turn to alternative assets as a source of stability and return.

White Paper Archive

2009: The Benefits of Timberland in a Canadian Investment Portfolio

Investing in timberland assets has shown to provide significant diversification benefits and improve overall portfolio performance when combined with other assets held by a typical U.S. investor. This finding provides an incentive for consideration of timberland investments for any investor world-wide, but lacks insight into the performance of the asset class compared to relevant local alternatives. The following analysis assesses the benefits of adding timberland investments to a portfolio comprised of Canadian assets with returns denominated in Canadian dollars. The list of indices used in the analysis is provided in the End Notes.

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