Matariki Forests' new shareholder Phaunos Timber Fund sees New Zealand as a stable and receptive economy to invest in with exposure to some of the fastest growing countries in the world.
Phaunos, an investment vehicle based in Guernsey in the Channel Islands, announced on Christmas Eve plans to invest $167 million in shares and loans to Matariki Forests, which owns six New Zealand forest estates.
The investment in New Zealand is the first by Phaunos and among the biggest it has made so far, according to its accounts and investment statements.
Phaunos has raised $US559.9 million ($NZ764 million) since it was created in December 2006 to invest in plantation forests and timber-related assets around the world. At June 30 it had $US211.6 million of portfolio commitments drawn down.
The investment in Matariki, the third-biggest forest owner in New Zealand with 132,000ha of productive timberland, is subject to Overseas Investment Office approval.
Phaunos said it would be the largest shareholder in Matariki on completion of the deal, without giving details.
Before this investment Matariki's shareholders comprised US-based Rayonier, the Rosenburg Real Estate Equity Fund and AMP.
Phaunos, which is managed by FourWinds Capital Management, said all timber from Matariki would be harvested on a sustainable basis.
The Matariki Forests are expected to produce an average of more than 2 million cu m of timber per year over the next decade and into the future, Phaunos said in a statement to the London Stock Exchange.
"We are very pleased with this agreement to invest in Matariki. These are world class assets managed by a proven team of forestry experts," Liane Luke, chief timber officer of FourWinds said.
Rayonier New Zealand has managed Matariki since it was established as an investment vehicle in 2005.
"New Zealand possess a very stable and receptive economy and has market exposure to some of the fastest-growing economies in the world," said Ms Luke, who was a vice president of Hancock Timber Resources Group from 1996-98.
USs-based Hancock is now the largest forest owner in New Zealand.
Phaunos has allocated $US200 million to China Green Forestry Company, a joint venture investing in existing and new poplar plantations in China, and $US150 million to Eucateca, a joint venture partnership with a timber management company in Brazil to invest in teak and eucalyptus plantations.
By June 30 it had reviewed 20 projects in China and rejected eight and identified six as a priority.
The fund experienced unrealised losses from forest revaluations in its latest accounts and said harvesting in some of its forests was delayed by low timber prices across the world.