Silver Creek Capital Management, an alternative investment boutique focusing on private credit, hedge fund and real asset strategies, has launched a new joint venture with Plum Creek Timber Company enabling institutions to directly invest in timber assets.
Twin Creeks will provide institutional investors an opportunity to co-invest in timberlands currently managed by Plum Creek with the objective of growing the portfolio to approximately USD1 billion in valuation over time through opportunistic, selective timberland acquisitions from third parties. The venture is intended to be a long-term timberland investment with an initial 15-year term. The initial portfolio, valued at USD560 million, will consist of 260,000 acres of Southern US timberland located in five states sourced from Plum Creek.
Plum Creek will retain a 25 per cent interest in Twin Creeks and will serve as property manager of the timber assets. Silver Creek will provide fund management and fiduciary services to the venture.
Lead institutional investors in Twin Creeks include the Washington State Investment Board, the Oregon Public Employees Retirement Fund, and the Alaska Permanent Fund Corporation, which have committed USD300 million, USD200 million and USD100 million, respectively.
“This partnership provides sophisticated institutional investors a unique opportunity to directly access a portfolio of timber with a world class partner in Plum Creek, one of America’s largest timberland owners and most successful operators,” says Bryan Weeks (pictured), President and CEO of Silver Creek. “We believe fundamentally in the benefits and characteristics of this asset class and we plan to continue growing our timber portfolio in the years ahead.”
“We’re excited to partner with Silver Creek and these leading institutions,” says Rick Holley, Chief Executive Officer of Plum Creek. “Importantly, this co-investment structure uniquely aligns the interests of the property manager and investor clients, an important consideration for institutional investors. We look forward to managing and growing the joint venture while delivering solid returns over the long term.”
Bob Ratliffe, Silver Creek Managing Director and Head of Real Assets, says: “Institutions are seeking ways to invest directly in real assets and partner with proven operators. Gaining immediate access to a portfolio of this size and quality has proven to be very attractive to investors at a time when alternative investments that are uncorrelated, provide cash flow and an inflation hedge are in high demand.”
Bill Turner, PhD, a veteran of the institutional timber industry, will serve as Co-Portfolio Manager and will work closely with Ratliffe in managing Twin Creeks. Twin Creeks will begin operations in the first quarter of 2016.