Overseas interest in NZ's forests

Matariki Forests' new shareholder Phaunos Timber Fund sees New Zealand as a stable and receptive economy to invest in with exposure to some of the fastest growing countries in the world.

Phaunos, an investment vehicle based in Guernsey in the Channel Islands, announced on Christmas Eve plans to invest $167 million in shares and loans to Matariki Forests, which owns six New Zealand forest estates.

The investment in New Zealand is the first by Phaunos and among the biggest it has made, its accounts and investment statements show.

Phaunos has raised US$559.9 million ($760 million) since it was created in December 2006 to invest in plantation forests and timber-related assets around the world. At June 30 it had US$211.6 million of portfolio commitments drawn down.

The investment in Matariki, the third-biggest forest owner in New Zealand with 132,000ha of productive timberland, is subject to Overseas Investment Office approval.

Phaunos said it would be the largest shareholder in Matariki on completion of the deal. Before this investment Matariki's shareholders comprised Rayonier, the Rosenburg Real Estate Equity Fund and AMP.

Phaunos, which is managed by FourWinds Capital Management, said all timber from Matariki would be harvested on a sustainable basis. The Matariki Forests are expected to produce an average of more than two million cubic metres of timber a year over the next decade, Phaunos said.

"We are very pleased with this agreement to invest in Matariki. These are world-class assets managed by a proven team of forestry experts," said Liane Luke, chief timber officer of FourWinds.

Rayonier New Zealand, a subsidiary of Rayonier, has managed Matariki since it was established as an investment vehicle in 2005.

"New Zealand possesses a very stable and receptive economy and has market exposure to some of the fastest-growing economies in the world," Ms Luke said.

Phaunos has allocated US$200 million to China Green Forestry Company, a joint venture investing in existing and new poplar plantations in China, and US$150 million to Eucateca SA, a joint venture partnership with a timber management company in Brazil to invest in teak and eucalyptus plantations.

- NZPA