SLM Partners has completed the first property acquisition on behalf of its sustainable Irish forestry fund, with a number of other properties set to close by year end
SEPTEMBER 24, 2018. The SLM Silva Fund completed its first transaction today, taking possession of a 33-hectare forest property in Ireland. The Fund has agreed sales on a further five properties. Together, these properties have a total value of €2.1 million, representing 10% of Fund capital. The Fund had a first close on 28th March 2018 and secured further investment in May, with additional investors currently undergoing the subscription process.
The first property acquired is a high quality, 25-year old Sitka Spruce plantation on a former heathland site in Co. Wicklow, Ireland. The property has an internal track that will be upgraded to a forest road. A first thinning operation will be undertaken immediately to improve the stands, generating an early cash yield for the Fund.
So far, the Fund team has originated 172 forest properties with a combined gross area of 5,613 ha from a range of sources, some advertised and others off-market. In addition to the six transactions currently in progress, the Fund has made offers on a further 16 properties with a combined value of €3.2 million. Almost all these properties will require thinning in the first 1-2 years after acquisition.
“We have been pleased with our ability to source and complete transactions in a disciplined manner,” said Paul McMahon, Managing Partner at SLM Partners. “More privately-owned forests in Ireland are coming on the market, and we will be able to achieve economies of scale by aggregating sites into a larger portfolio.”
The SLM Silva Fund was established in Mach 2018. It is managed by SLM Partners, a global asset manager that specialises in ecological forestry and farming systems. Forestry management services are provided by an Irish forestry company, Purser Tarleton Russell Ltd. A key differentiating factor of the Fund is that it seeks to replace clearfelling with an alternative, sustainable form of forest management known as Continuous Cover Forestry (CCF) or ‘close to nature’ forestry. This can deliver many environmental benefits, while being commercially viable.
The Fund has attracted investment from several large European institutional investors, an Irish endowment fund and two family offices. The European Investment Bank (EIB) acted as anchor investor, via its Natural Capital Financing Facility (NCFF). SLM Partners is in conversation with a number of potential investors about joining the fund, and the goal is to achieve a €50 million final close in the first half of 2019.
The team are currently preparing the Terms of Reference for a €750,000 EIB-funded technical assistance facility that will support the provision of expert assistance to the Fund in the following areas: CCF training for property managers and harvesting contractors, installation and measurement of permanent inventory plots, development of carbon and biodiversity monitoring systems, deer management and PEFC/FSC certification.
ABOUT SLM PARTNERS
SLM Partners is an asset management firm that specialises in agriculture and forestry strategies that deliver superior risk-adjusted returns and positive environmental impacts. Founded in 2009, it manages an Australian beef cattle fund that is applying holistic planned grazing across 480,000 hectares of land, and it is developing farmland investment opportunities for institutional investors and family offices in the USA.
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