Farmland and timber investing
Can anyone here recommend good resources/reads for timber and farmland?
"From 1992-2006, returns for timber were 12.2%. During the same time, large cap stocks returned 10.6%, small cap stocks returned 15.4%, international equities returned 8.2%, and corporate bonds returned 8.0%. When you consider volatility using the Sharpe Ratio, timber has the highest risk-adjusted returns, even beating small cap stocks (the Sharpe ratio for small cap stock was 0.63%, while reaching 0.84% for timber). Since 1987, the timber index has had only one down year in 2001 (-5.25%). During the same time frame, the S&P 500 has been down four times (as low as -22.10%)."
Google scholar for keyword TIMO. Those are essentially pool for Timberland investing for inst'l investors. You should find some interesting papers there.
Thanks
OP your post got me interested as well. This may or may not help you but a quick Google search yielded the following:
https://www.campbellglobal.com/downloads/public/Timber_Primer.pdf
www.osiny.org/site/DocServer/Weyehauser_TimberPrimer.pdf?docID=2442
www.valuewalk.com/wp-content/uploads/2014/07/JK_IntroToFarmland_714-1.p…
Campbell Global seems to be a big player in timber investing and is focused on timber a la Glencore is for O&G and metals.
Let me know if you find anything else. I'll keep digging.
I'm not looking into active investing, but timber and farmland looks like an interesting addition to investment portfolio because of the return profile.
You begun thinking about starting a farm I see.
Bump
Speaking as a guy who works for an active timber (land) investor, we use selling timber rights to defer/cover costs for a gigantic piece of property being held as a long-term land play (30+ years). So far we cover pretty much all of our carrying costs through timber rights, hunting rights, and a few industrial ground leases (although I think it'll be 100 years before the land is desirable for residential development).
(Note: I know zero about stock-level timber investing that the OP is asking about.)
I am interested in both passive public investments and active direct private investments.
How many sasquatches do you all grow per acre?
Jamestown dabbles in this space as well.
As far as financial analysis on timber REITs, is it typical to use metrics like regular REITs (NAV vs market price, FFO and AFFO multiples) or more like traditional corporations? Or something else?
heister you're up
Weyerhaeuser
What are you looking for? Ground ownership? Operational partnerships? There are many different kinds of avenues into the space, but you have to realize that this is an actual job, you can't just buy timber land an expect it to produce.
Land ownership, rent land to farmers/operators
Farmland Investing? Advice requested... (Originally Posted: 05/03/2014)
The Bank of New York Mellon has recently offered me a role at Insight Investment Management, their largest British subsidiary (about $400 billion AUM). Most of the people in the industry I know think quite highly of them, particularly their fixed income/LDI activities.
However, the offer itself has come from their real assets group, and I'm of two minds about it. On one hand, farmland seems incredibly esoteric for a first job, and I fear that the skills won't be transferrable to other types of real estate.
On the other though, it seems like it could potentially be useful. They have a very private equity-ish bent (buy up emerging market farmland, improve to increase crop yields, and sell, 5 year holding periods generally), and real estate private equity has always interested me. They also sell the commodities (grain, corn, soy, and beef), and I know that the role will involve a good deal of exposure to both aspects of the business.
I suppose what I'm asking is if the role is going to be a great introduction to two asset classes, or is too esoteric to be broadly applicable to either. The idea of being flown out to New Zealand and Australia to visit farms is appealing (hillbilly by extraction), but I don't want to make a decision that will pigeonhole me before I've even begun my career in earnest.
Thanks to anyone who can offer some insight into the situation!
Not going to lie, that position sounds pretty badass. If you're interested at all I would advise you to take it. I think EM ag is a huge growth opportunity, and if you end up wanting to switch there's always business school.
Can't contribute here, but would like to bump as I am interested. Looks like a great opportunity though.
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