AIMCo to buy swath of Aussie timberland
Alberta’s arm’s length investment manager is partnering up to buy a swath of Australian timberland in a deal worth $415 million.
Alberta Investment Management Corp., known as AIMCo, is teaming up with the Australia New Zealand Forest Fund to buy the Great Southern Plantations assets, which cover 2,500 square kilometres of forestry and agricultural lands across six Australian states.
AIMCo holds an 80 per cent stake in the deal, which closed Wednesday after more than a year of negotiations and took advantage of a scheme that went into receivership during the recession.
Properties in the acquisition are spread across southern and eastern Australia and take advantage of that country’s balmier climes and options for land use, said AIMCo chief executive Leo de Bever in an interview Thursday.
“Trees grow a lot faster in Australia,” de Bever told the Herald. “And this is a mixed forest and agriculture play, geared to the Asian market for both fibre and food.”
In contrast to North America, which has seen the value of its forestry industry plummet, Australia has a wood fibre shortage, he said.
At the same time, the country and New Zealand are increasing the use of biomass such as wood pellets to generate power alongside coal, increasing the revenue streams of the industry.
The announcement Thursday increases the investment fund manager’s $2 billion portfolio of infrastructure and timberland assets, which includes forestry in British Columbia and the more recent acquisition of a toll road in Chile’s capital Santiago.
Under de Bever’s direction the $72-billion public-sector fund has spread its net beyond North American borders to invest in Australian, European and Latin American ventures — where ever the returns are best. “You can’t interpret geographical distribution as meaning anything,” he said.
“We’re basically looking at opportunities anywhere we can find them and we’ll close them when we can. There is no overriding policy of being in Alberta or not.”
AIMCo splits its investments into six main categories, the bulk in Canadian money markets and fixed income investments, followed by public equities, real estate, mostly in Canada, bonds and commodities — again, Canadian — private equity, and infrastructure and timberlands.