In the decades since, timberland has proven itself a compelling asset class offering strong market fundamentals, attractive returns, limited correlation with traditional asset classes, and a reliable hedge against inflation. Now, investors are becoming increasingly conscious of the quantifiable climate benefits that timberland offers.
Timberland — and the wood fibre it generates — is vital to the global economy. It provides a renewable resource for housing, furniture, packaging, tissue, heat and energy. What’s more, we depend on forests for environmental services like air and water purification.
For many decades, timberland was owned primarily by governments, wealthy families, and corporates. In the 1980s, rising demand for timberland corresponded with the restructuring of the forest products industry in the US, resulting in a shift in timberland ownership from operating companies to financial investors.
