September 23, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

Timberland is rapidly gaining credibility as a prime alternative investment for gaining environmental, social, and governance (ESG) benefits for portfolios. As such, demand for these kinds of sustainable alternatives continues to strengthen among the pension and institutional investor space as part of their broader commitments to climate change mitigation and sustainability.

Atlanta-based Domain Capital Group announced that its subsidiary, Domain Timber Advisors, closed on two timberland acquisitions in the U.S. states of Georgia and Kentucky for two separately managed accounts (SMAs). 

Both of these transactions add to the portfolios of existing accounts, and represent the company’s ninth SMA acquisition since 2018 for such clients.

The range of expertise of Domain Capital Group’s teams reaches across numerous asset classes including natural resources, real estate, media, entertainment, technology, credit, and other financial services. As of March 31, 2021, the group managed approximately $5.8 billion in AUM through its two registered subsidies: Domain Timber Advisors, and Domain Capital Advisors. These two units comprise approximately $5.14 billion in real estate, debt, alternative, and other assets, and $663 million in non-RAUM real properties.

“Our team is excited to grow these client relationships with their increased capital investments,” said Joe Sanderson, managing director, natural resources, Domain Timber Advisors. “We also appreciate their continued trust in our team’s ability to identify and secure assets that meet specific investment objectives and bespoke mandates.”

Southward Bound

Timber assets in the southern region of the U.S. have recently been featured in timber investment news.

In mid-September, the Development Bank of Japan (DBJ) announced its investment in TIR Europe Forestry Fund II. Managed by Atlanta, Georgia-based Timberland Investment Resources LLP (headed by CEO Mark Seaman) and its European affiliate Timber Investment Resources Europe LLC (TIR), which has AUM exceeding $1.65 billion (836,000 acres), TIR’s Fund II makes capital investments in mostly medium-sized forests in the southern region of the U.S.

For Domain Timber Advisors, the structure of these two acquisitions and the multi-factored benefits afforded by the asset class make them a good strategy.

The investor noted in a statement that SMAs – which can be configured based on geography, asset size, and yield versus net return requirements – offer clients not only a high level of flexibility, but also strong control of asset portfolios, presenting a good fit for clients seeking greater diversification or lower risk exposure. And given the range of economic benefits that timber investments offer, the group continues to see attractive opportunities in the space. 

“Given the favorable market conditions, we’re continuing to see attractive assets and buying opportunities for our accounts,” said Peter Walker, vice president of natural resources investments, Domain Timber Advisors.

“In fact, we believe strong housing demand, record spending in the repair and remodel market, and increased capital investments in lumber manufacturing all point to long-term price sustainability for timber and timberland,” he continued. “As such, these positive economic factors should help deliver additional value for our clients in the natural resources asset class.”

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.