R&A Investment Forestry is a forest investment management and advisory company whose interests align directly with the investor; an advisor sitting squarely on the investor’s side of the table.
A New Investment Environment
New conditions call for new approaches. The industry has now entered a new phase, one that is not simply an extension of the old. Until recently, increased timberland value was driven largely by arbitrage-based ownership transfer and resulting discount rate compression. Markets were forgiving and investments were relatively insensitive to liberal assumptions at acquisition. The transfer from public forest products companies to investors is now complete and the next phase will be less tolerant.
Successful investors will be more proactive in decision making, requiring a higher level of internal expertise, either on staff or from an advisor detached from the need to both market investment products and place capital. Due diligence will play a greater role at all levels. Timberland as an investment asset has become complex enough that investors without specific experience in forest acquisition and management cannot expect to confidently monitor the decisions and activities of their asset managers.
R&A Investment Forestry Fills This New Role
R&A serves forest investors through two avenues, centering on Investment Management, and Investment Advisory. We provide investors with “internal” expertise without the need to add staff, acting as the interface between investors and managers. We are paid for success in much the same way the investor is paid.
The Role of the Investment Manager Is Unchanged
R&A is not a timberland investment manager and does not compete with them. Investment managers continue to raise funds, market investment products, devise investment structure, source, negotiate, and close transactions, and sell assets as appropriate. And they continue to provide well developed and indispensable skills in day to day asset management. R&A provides a new component as the first line of interaction between the investor and the manager.
While its focus is on ongoing relationships with forest investors, R&A’s expertise may also be applied in an advisory capacity without long-term commitment. This applies most directly when an investor is considering timberland as an investment but has not yet decided to invest. R&A advises prospective forest investors in understanding the asset, determining preferred asset allocation and diversification, due diligence, management selection, and ultimately in the decision to enter the asset class – or not.
For current timberland owners, R&A review’s existing timberland portfolios in the context of current conditions and recommends adjustments where appropriate.
In conjunction with these activities, R&A performs specific tasks of a shorter-term nature on a project basis.