CalPERS Looks to Sell 300,000 Acres of Timber Holdings

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CalPERS is looking to sell off about 300,000 acres of forestry, which equates to about 20 percent of the pension fund’s timber holdings.

The move is presumably part of CalPERS’ ongoing plan to reduce the cost and complexity of its portfolio. The pension fund exited hedge funds entirely last September, and more recently consolidated its private equity portfolio by slashing managers.

More from the Wall Street Journal:

The California Public Employees’ Retirement System, or Calpers, is seeking buyers for roughly 300,000 acres of forestry largely in Louisiana amid a broader review of its timber holdings, according to people familiar with the matter. The woodland represents about one-fifth of roughly 1.3 million U.S. acres controlled by the Sacramento-based fund.

“We continue to look through the entire portfolio to make sure that all programs fit with our current strategic priorities and our efforts to reduce costs and complexity,” a Calpers spokesman said. He added “no decisions have been made,” and there is no deadline for completion of the pension fund’s internal review of forestry holdings.

Any move Calpers makes away from the timber industry will likely influence other investors because of its size and history as an early adopter of alternatives to stocks and bonds.

[…]

The value of timber assets doesn’t always correspond with the movements of the global markets because investors can sit out tough economic times by simply letting the trees grow larger, said consultants and industry analysts. When conditions improve, timber is a guard against inflation because wood prices move closely with real estate and local economies, the consultants and analysts said.

A source told the Wall Street Journal that CalPERS may consider putting an additional one million acres on the market – this time located in Texas – if the Louisiana sale is successful.

 

Photo by Rick Payette via Flickr CC License

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