ecotrust forests - bettina von hagen
DESCRIPTION
TBLI CONFERENCE™ EUROPE 2012 - Zurich - SwitzerlandTRANSCRIPT
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OVERVIEW
• We are a forestland investment manager that invests in ecologically significant forestland in the Western United States
• Our investment strategy reduces reliance on traditional timber markets and creates additional value by monetizing over-looked sources of income from conservation easements, tax credits and environmental markets
• Unique capacity in combine private investor capital with low-cost concessionary debt and new market tax credits to generate superior returns
• Currently Launching Ecotrust Forests II: Raising $75 million in Equity
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PIONEERING A NEW MODEL FOR FORESTRY
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carbon
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Years After Clearcut
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Douglas-fir, Pacific NW W side
Hemlock-Sitka Spruce, Pacific NW W side
Douglas-fir, Northern Rockies
Lodgepole Pine, Northern Rockies
Maple-Beech-Birch, Lakes States
Maple-Beech-Birch, Northeast
Loblolly-Shortleaf Pine, Southeast
Oak-Hickory, Southcentral
• Total demand forecasted for offsets in CA cap and trade is 200 MMT CO2e
• 8 MMT CO2e shortfall forecasted in first compliance period
• PNW forests have outstanding capacity to store carbon; one of few approved carbon offset project types.
community benefits
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Greater number of jobs per acre harvested.
Long-term relationships with local contractors and additional forestry activities generate employment and community value
Enhanced community benefits in form of clean water, recreation, hunting, fishing, views
Access to New Market Tax Credit program with $3.5 billion of annual authority generates 25% subsidy for every $1 invested in an economically distressed community.
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INVESTMENT STRATEGYWe employ an integrated forestland investment strategy that produces high-quality timber while
at the same time enhancing the health and resilience of ecosystems and rural communities
• We aim to identify and captures revenue from over-looked sources of value like conservation easements, restoration grants and environmental markets that can unlock additional income for investors
• Our integrated approach allows us to access low-cost capital via concessionary debt from foundations and tax credits for investments in economically depressed communities that are not usually available to other managers
FOR ILLUSTRATIVE PURPOSES ONLY
EXPENSES EXPENSES
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CASE STUDY: FUND I - GARIBALDI
Mgmt Objective: Water Quality, Habitat RestorationActivity: Bridge replacement, log placement & pre-commercial thinning Grant Funding ($80 K)
Mgmt Objective: Economic Opportunity & AccessActivity: Firewood program & local employmentNew Market Tax Credits ($4M)
Mgmt Objective: Forest StructureActivity: Variable Retention HarvestTimber Income ($550K)
Mgmt Objective: Carbon, Water & Species ProtectionActivity: Potential 1215 acre road less reserve in Moss Creek watershedCarbon Credits / Mitigation Bank funding (Potential $5M)
GARIBALDI PROPERTY MAP
EFM has generated timber income, carbon offsets, tax credits and conservation funding on the Garibaldi property
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ECOTRUST FORESTS I – HIGHLIGHTS
• Harvested ~7 MMBF on properties, using silvicultural treatments like variable retention harvesting, patch cuts and pre-commercial thinning
• Attracted ~$300,000 in conservation funding that enabled us to execute log placements, pre-commercial thinning and habitat creation
• Entered into carbon transactions valued at $500,000
• Ecotrust Forests, LLC is an open ended, perpetual duration investment fund managed by EFM
• Acquired 4 properties in Oregon and Washington between 2005 and 2012* totaling ~13,000 acres
• Secured New Market Tax Credit transactions that provided below-market financing for all of our property acquisitions, leveraging investor capital by $7 million without dilution.
• 3 properties purchased between 2005-06. • Garibaldi: Bought in phases between 2006-2010
• 1 follow-on investment in 2012 (Dickey-Gap)
ECOTRUST FORESTS II - INVESTMENT STRATEGY
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• Proprietary deal flow • Customized Spatial analytical tools• Differentiated valuation and due
diligence capacity
• Integrative management approach that generates unique monetization opportunities
• Relationships and technical capacity to integrate conservation strategy with timber production model
• Relationships with strategic buyers and timberland market actors creates flexibility in exit options
SAMPLE ACQUISITION - SKOKOMISH
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observations
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Opportunities to monetize ecosystem markets are expanding, but there is considerable investor fatigue, especially with carbon
Successful investment strategies access carbon (and other ecosystem service markets) to enhance results but do not rely on them.
Continuing investment needed in carbon (and other ecosystem service market) accounting, tax treatment, and valuation – implications for property exit.
Forestland investment has potential to combine traditional financial benefits of timberland (inflation hedge, diversification, low risk) with exposure to emerging ecosystem service markets for a superior integrated return.
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Tangible. Stable.Secure.Intergenerational.
For further information: Amrita Vijay Kumar, [email protected]; (503)
467-0801Bettina von Hagen, [email protected]; (503) 467-
0756