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April 25, 2005

The Forestland Group, LLC (TFG) earned FSC forest management certification for the approximately 1.5 million acres it currently manages in fourteen states - Michigan, New York, Pennsylvania, West Virginia, Tennessee, Virginia, Kentucky, North Carolina, Texas, Missouri and Maryland. SmartWood, a program of the Rainforest Alliance, granted the certification. TFG originally earned FSC certification for a 32,000-acre tract of land along the Emory River in Tennessee. Five years later, TFG is the only timberland investment management organization (TIMO) in the world to preside over an entire portfolio that has been certified according to the terms of the FSC.

Based in Chapel Hill, NC, TFG was formed in 1995 to pursue investments primarily in naturally regenerating hardwood and pine forests for institutional investors. The firm focuses on naturally regenerating hardwood and pine forests containing considerable volumes of intermediately aged, vigorous timber stands. Carefully administered harvesting during the management phase enables TFG to generate periodic cash flow for investors and accelerate the biological growth of the remaining timber. The primary product of the firm's acquisition and management strategies is valuable saw timber. Using proven financial and forest management concepts, TFG creates value for investors and works to achieve good financial returns on diversified portfolios of forestland.

TFG believes in being a responsible steward of the land and follows the principles of sustainable forestry. Forestland management plans are designed on a tract-by-tract basis, paying careful attention to each property's unique biological habitat and diversity. The firm's goal is to seek competitive returns while maintaining the productive capacity of the forest.

Today, TFG is one of a steadily growing number of TIMOs that have emerged to organize and manage partnerships of institutional investors. "With all of the turnover in forest ownership, TIMOs are playing an increasingly important role by channeling investment money from pension funds and other investors into the forest. If managed appropriately, they can provide income to investors and manage land sustainably, and [FSC] certification provides the assurance they are managing according to our standards," SmartWood Senior Forester Loy Jones.

According to TFG's Director of Forest Information Systems Kaarsten Turner Dalby, FSC certification is helping TFG to:

  • Differentiate their product in the marketplace;
  • Differentiate their private equity funds for investors as well as provide a level of comfort and accountability to their limited partners;
  • Eliminate extensive negotiations in conservation easement agreements;
  • Possibly reduce certain stringent characteristics of potential future state legislation.

According to SmartWood Director and Chief of Forestry Richard Z. Donovan, "there are times when you need leaders to set the stage for changes throughout an industry. In the TIMO sector, and for commercial forestland managers in general, TFG has stepped up to fulfill that role. Fortunately they are not alone - we are seeing other TIMOs also move in this direction. But being first only happens once, and TFG is the first TIMO in the world to have the breadth and depth of vision to try and show that commercial forestland management, forest conservation and FSC certification make sense."





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