Attributes of Targeted Timberland Investment Properties
- In North America, the firm focuses on naturally regenerating hardwood and softwood forest types, including upland hardwoods, bottomland hardwoods, pines, mixed pine-hardwood, and other conifers—generally containing considerable volumes of intermediately aged, vigorous timber stands.
- In Central America, the firm focuses on hardwood plantations and high-valued natural hardwood forests.
- The primary product of the firm’s acquisition and management strategies is valuable sawtimber. Using proven financial and forest management concepts, TFG creates value for investors and works to achieve attractive financial returns on diversified portfolios of timberland.
- Located within the Eastern United States, with selective opportunities in Canada, Central America, and South America.
- Generally, tracts are 2,000 acres and larger, contain well-stocked stands on productive sites with reasonable operating conditions, and are located in areas with currently active or growing timber markets.
Investment Due Diligence
TFG implements a systematic, disciplined approach toward due-diligence activities associated with prospective properties. This disciplined financial assessment includes the following elements:
- Property screening – focus on forest productivity and timber-market characteristics.
- Conduct inventory – special focus on tree-size distribution and grade.
- Prepare growth and grade projections.
- Develop tentative harvest schedules.
- Estimate volume of residual timber.
- Assessment of timber and land markets.
- Establish financial assumptions.
- Prepare net cash flow projections.
- Estimate internal rate of return and discounted cash flow values.
- Conduct sensitivity analysis of key assumptions relative to financial returns.
- Complete attribution analysis – an investigation of the sources of return.