UK county council pension fund awards €71.5m timberland mandate

Fund puts 2% of assets into timberland

The £3.4bn Essex County Council Pension Fund has awarded a £60m (€71.5m) timberland mandate to Stafford Timberland Group, the investment firm co-founded by former Pantheon Ventures chief executive Richard Bowley.
The Chelmsford-based fund in eastern England said the mandate is equivalent to around 2% of its assets. The request for proposal had said that segregated investment solutions, pooled funds, listed funds, fund of funds and multi-manager solutions would be considered.
Stafford was founded in 2002 and manages around €600m for institutional investors; it has offices in London, Sydney and New Hampshire.
It comes as other institutional investors, such as the £9bn Pension Protection Fund, are seeking farmland and timberland managers. Swedish state fund Första AP-fonden (AP1) has indicated it will shift its portfolio towards “real assets” including farmland and timber.

The Essex fund’s award criteria was equally weighted towards the “most economically advantageous tender” in terms of quality of presentation, effectiveness in answering questions and willingness to meet clientneeds. The contract was awarded on November 21; the fund received eight offers.
In its 2010-2011 annual report (link), released at the end of last year, the fund said it had commissioned research on agricultural commodities and cleantech “as part of a potential widening” of its alternative assets portfolio.

But it also said it had decided in 2009 to disinvest from the ‘shareholder activism’ asset class due to poor performance. It exited the Relational RH1 Fund, the majority of the Governance for Owners European Fund and the main fund held in the Hermes Specialist UK Focus Fund during the year, it said. As at the end of March, its only investments in the sector were a residual holding in one illiquid investment within the Governance for Owners European Fund and a small investment in a “side pocket” of the Hermes UK Specialist Focus Fund to which it was contractually tied.

Elsewhere, Flintshire County Council, on behalf of the Clwyd Pension Fund, has tendered around £7m in frontier markets (equity focused, but also may invest in debt and/or property) via consultant Bfinance. The deadline for responses is April 4.