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I'd like to share this post on LandThink blog, as I think it summarizes the pay structure and some of the issues in timberland investments very well. How Do Timberland Investment Managers (TIMOs) Make Money? ■

The following post on AllAboutAlpha.com is a good very-brief-and-basic introduction in the timberland investments. I happen to know one of the speakers mentioned in the post personally, and some of the graphs look very familiar: How much wood would a woodchuck allocate if a woodchuck would allocated part of his portfolio to wood? : "As alternative investors know, money does grow on trees after all. The trick is: how to harvest it." ■

I guess there is an upside to anything after all. The trees clearly don't mind having higher temperatures and more carbon dioxide in the atposphere. For details, read this post on Forestry Investment Blog: Global Warming the New Fertiliser

In late October I travelled to the US and Canada on a business trip that was exclusively dedicated to timberland investments. I had an opportunity to meet with a number of investment managers and some investors into the asset class, tour the timberland both in the South and in the Pacific Northwest, and collected a dearth of data, both from conversations and in print. It would take a multi page report to describe everything I learned, but I just wanted to outline some topics that I felt were of particular interest, and draw some parallels with other alternative asset classes.

Last Thursday (December 3rd) investment managers, prime borkers, compliance specialists and other professionals involved into hedge funds this way or another, gathered in Roppongi Hills overlooking the busy Tokyo city for a few drinks and a lot of networking. Organized by Mr. Stefan Nilsson, the founder and president of the Hedge Fund Club , the party was much more lively and cheerful than the same event a year ago. This time it was even filmed by a local TV station, and feeled much more crowded. I enjoyed meeting new people, among them a manager of an art fund, and a Europe-based manager planning to launch a "forestry fund", which apparently is what timerland funds are called in Europe. All in all, things seem to be picking up little by little, so let's hope for a truly happy New Year.

Today it was officially announced that an article on timberland investments, on which I have been working with two colleagues for about three months will be published in the September issue of the Japanese Securities Analysts Journal (in Japanese). You will easily find my name on the announcement page, because it is the only one in katakana (the only foreign name).

Forget about sophisticated financial products. Forget about CDOs, especially if they include (God forbid!) MBS. Investors are going back to basics. In the time when the allegedly absolute-returns Hedge Funds are making headlines with big drawdowns, and the Private Equity firms cannot figure out how to make a buyout with no credit lines available in the banks they had been dealing with for decades, what does it leave a sophisticated investor with to invest into? It comes down to the Real Assets. One of the most popular (at least as a topic of conversation) investments of this sort is Timberland Investment. The beauty of it is that once the tree is planted, it grows without any other cash expenses. All that investor has to do is to make a decision on when and how much of the forest should be cut to sell the timberland and get returns. Timberland investments a long-term, typically over 10 years, and thus fairly illiquid, and compared to Private Equity, for instance, they generate lower re...