Timberland investment management organizations: Business strategies in forest plantations in Brazil

Abstract

US-based timberland investment management organizations (TIMOs) have led a group of institutional investors that manage timberland assets in Brazil. This research investigates US-based TIMO strategies and preferences in investments in Brazil. We performed a statistical cluster analysis to identify similarities between TIMOs according to forest, institutional, and macroeconomic preferences. Four TIMOs had similar strategies and ranked macroeconomic indicators as more important than forest and institutional elements for making investments. Return and risks were listed as the most crucial variables in investment strategies. Market size, political risk, tax systems, and timber markets were also cited as important indicators of a business environment. Brazil and other emerging countries should focus on political stability, granting complete land tenure rights, and simplification of the tax system to attract new investors to timberland.