A Trillion-Dollar Public Pension Fund

HAMSTREET ROLES:  Advisory Services

SUMMARY:  Client engaged Hamstreet to assess the value of its timber holdings and provide advice concerning their sale.

THE BACKGROUND:  A large public employee pension fund received a $600 million cash offer to purchase its 98% interest in 870,000 acres of timberland located in ten eastern states. Seeking a consultant to offer advice on the sale, the fund hired Hamstreet because we met its three principal demands: 1) demonstrated expertise in the forest product industry; 2) impeccable integrity; and 3) ability to move swiftly in order to preserve the cash offer.

THE CHALLENGE:  We mobilized two teams of experts on short notice: one group of analysts examined records of the client’s extensive timber portfolio to review previous value assessments, make adjustments for recent harvesting and growth, study backgrounds, analyze market trends, and assess risk. Meanwhile, a second team of professional appraisers headed into the forest to evaluate representative samples of the tracts in question.

THE RESULTS:  In a mere three weeks, Hamstreet produced a comprehensive recommendation. Determining that the land would not continue to appreciate at its past rate, we recommended the sale. At the same time, though the offer was fair and reasonable, we viewed it as slightly low. This advice enabled our client to negotiate a higher price with the buyer and complete the transaction.