CalPERS Selects Managers for $1.2 Billion Timber Portfolio
SACRAMENTO, CA - The Investment Committee of the California Public Employees' Retirement System (CalPERS) today selected Hancock Timber Resource Group of Boston, Massachusetts and The Campbell Group of Portland, Oregon to manage the System's $1.2 billion timberland portfolio -- one of the largest privately held timber portfolios in the United States.
The Committee also selected UBS Brinson Partners to help the System invest in timberland outside the United States. All contract awards are contingent upon satisfactory completion of contract negotiations.
Hancock will manage more than 669,000 acres of timber valued at approximately $814 million located in the Northeast and South regions of the United States. The Campbell Group will manage more than 222,000 acres of timber in the Northwest valued at $439 million.
In an effort to seize promising opportunities in the timber markets abroad, CalPERS will work with UBS Brinson Partners of West Lebanon, New Hampshire to develop a strategic plan for future timber purchases internationally. Currently, CalPERS policy on timber investments allows for up 10 percent of the System's timber portfolio to be invested internationally.
"Value creation in today's timber industry requires regional expertise, and intensive management," said William D. Crist, President of CalPERS Board of Administration. "We are confident that with the experience and resources provided by these managers, we will be able to ensure continued sound investment and excellent returns while managing risk."
The structure of the timber portfolio manager contracts will be modeled after CalPERS core real estate program. The pension fund will achieve alignment of interest with each timber manager through provisions such as co-investments, dedicated management teams and incentive fees. In return, timber managers will be given the investment discretion necessary to carry out a timber investment strategy approved by CalPERS.
CalPERS is the nation's largest public pension fund with assets totaling nearly $160 billion. The System provides retirement and health benefits to more than 1 million state and public employees and their families. For further information on CalPERS, please visits the System's Web site at www.calpers.ca.gov.
September 15, 1999
Contact: Brad Pacheco/Pat Macht
Office of Public Affairs