UniSuper in major Tasmanian forestry investment
One of Australia’s largest industry superannuation funds, UniSuper has joined with UK and Dutch pension funds to invest in a forestry plantation.
UniSuper has announced that it has joined with the UK’s Pension Protection Fund (PPF), and APG Asset Management N.V (APG) on behalf of its Dutch pension fund client ABP, to acquire Forico and a 170,000-hectare plantation forestry estate in Tasmania, from a New Forests managed fund.
The announcement said Forico is Tasmania’s largest private forest management company. The forestry estate is one of Australia’s largest plantation hardwood estates by productive area and consists of vertically integrated assets and operations spanning approximately 90,000 hectares of productive plantation forest. It also owns key infrastructure along the supply chain consisting of two wood processing mills, a seedling nursery, fibre technology laboratory, and port access via a freehold facility at Long Reach, Tasmania.
Under the agreement, the three investors will each own 33% of Forico and the forestry estate. New Forests will be retained to provide investment management services.
Commenting on the transaction, UniSuper head of Private Markets, Sandra Lee said the fund was delighted to be investing in an asset of scale and quality.
Another asset impossible to value, and with two other partners, illiquid, too.
How will they hide the asset value when fire, flood, disease destroy their crops? lol Weren’t plenty of financial advisers and accountants caught up in the demise of previous forestry/produce type investment schemes.
@XTA,
It’s always easy to be critical after the event but if you weren’t around back then, things were very different to where things are today.
Companies like Great Southern and Timbercorp were listed in the top 200 on the ASX.
The bulk of these investments had ATO product rulings.
In fact in 2003, Great Southern made $200M profit and distributed $60M as a dividend to shareholders.
Would you assess that company as likely to fail with guaranteed forward contracts selling all their timber to Japan ?
But here’s the thing, these investments were not necessarily right for everyone, just like every item on your APL is not appropriate for everyone.
Of course being wise after the event and being critical is certainly easy but I don’t know after more than 40 years in the business if any fund manager bats 1000 and gets it right 100.0% of the time.
There was a smattering of intellectual intelligence in 2006 where a handful of economists predicted the housing bubble that year but how many advisers do you think told their clients that they should get out of the stock market that was paying somewhere in the vicinity of 23.0% growth prior to the GFC ?
The profession you are in is not an exact science and things happen when you least expect them that are totally out of control.
Sitting on the sidelines and being critical is easy until it happens to you and your clients.
Yeah mate I was around then too. I was moreso making an attempt at humour, that Industry Super would still apply a generous valuation even if their crop/produce went up in flames, or lost to flood or disease. Remember TFS Indian Sandalwood? Think they had issues with flood and disease. So couple that in with erratic weather patterns, in particular move to el nino patterns which results in hotter dryer conditions ( more fire risks?) and other risks (bio security, drought, etc) then where does sit on the risk spectrum? If its industry super its safe as houses apparently.