Intended Launch of Gresham House Forestry Fund LP
19 February 2016
Gresham House plc ("Gresham House" or "the Company") (AIM: GHE)
Intended Launch of Gresham House Forestry Fund LP ("the Fund")
Gresham House plc, the specialist asset manager, today announces its intention to establish a new fund for institutional, family office and professional investors to be advised by its subsidiary, Aitchesse Ltd ("Aitchesse"). It is intended that the Fund will initially acquire an attractive portfolio of forests in the west of Scotland for £12.1m including all costs and taxes. This portfolio consists of five forests with an aggregate size of 1,975 hectares (4,880 acres). The Fund will be structured as a Scottish Limited Partnership (SLP) with a target size of £25.0m.
Contracts to purchase the portfolio have been entered into by Aitchesse (General Partner) Ltd ("AGP") with a property trust controlled by an established UK Pension Scheme through the payment of a non-refundable deposit of £500,000. This deposit will be funded by £250,000 lent to AGP by members of the Aitchesse management team and £250,000 from Gresham House. The directors of AGP are directors of Gresham House group companies ("the group") (including Aitchesse Limited), however AGP is not a subsidiary of the Company. The Fund intends to acquire the portfolio of forests from AGP with completion of the purchase expected on or before 31 July 2016 and AGP has exclusivity arrangements in place until this date.
Aitchesse was acquired by Gresham House on 23 November 2015 and manages in excess of £200m invested in c.30,000 hectares (c.74,000 acres) of UK commercial forestry on behalf of endowments, family offices and professional investors. Investment performance by Aitchesse has been strong with average annual returns of 18.3% achieved across their client accounts over the past ten years net of all costs including asset management fees.
The Fund's investments will focus predominately on high yielding Sitka spruce forests of various maturities from new plantings to harvestable woodlands and is intended to provide investors with an asset backed income and prospects of capital growth. The Fund aims to target annual unlevered returns of 10% after tax and net of all costs. In line with its stated strategy, Gresham House intends to support the Fund by investing from its balance sheet alongside third party investors.
Commenting on the acquisition, Rupert Robinson, Managing Director of Gresham House Asset Management Ltd said,
"AGP contracting to acquire this portfolio of forests is the first major initiative since Aitchesse became part of the Gresham House group.
"The opportunity to purchase such an attractive forestry asset as the cornerstone investment for the Fund is particularly exciting. The Fund will be Gresham House's first new collective investment vehicle investing in forestry, a growing asset class for institutional, family office and professional investors."
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Enquiries: |
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Gresham House plc |
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020 3837 6270 |
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Anthony (Tony) Dalwood, CEO Rupert Robinson, Managing Director Gresham House Asset Management Michael Phillips, Strategic & Development Director |
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Liberum Capital Ltd |
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020 3100 2000 |
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Neil Elliot |
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Jill Li |
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Montfort Communications |
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Gay Collins |
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07798 626282 |
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Rory King |
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020 3770 7906 |
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This information is provided by RNS
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