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Matthew Haertzen |
Matthew Haertzen, who joined Cogent Partners last June from the Idaho Endowment Fund Investment Board as cio of timber, is raising capital for Cogent’s first timber fund. He aims to bring in $300 million from nonprofit and high-net-worth investors for the WoodlandsPoint Fund Family. There will be an initial close on Sept. 30, with a final close at year-end. The fund should appeal to foundations and endowments with less than $500 million in assets because it is global and the minimum investment in only $1 million. “So with one single investment they can look to diversify around the globe,” he explained. Most timber funds have a $5 million minimum and a regional focus. “The biggest advantage I see in the timber marketplace is that from one year to the next, regardless of the economy, your trees are bigger,” he added. Cogent is targeting a 9-10% nominal return. “We expect to deliver this return through capital appreciation and annual distributions, which will be in the 5-6% range,” he explained. “We think this consistent annual yield will be particularly attractive for foundations and endowments that must make annual payments to their beneficiaries.” There is a 10-year lockup, although there will be increased liquidity after five years. Cogent charges a management fee of 0.85%, and then 15% of the returns greater than 8%.
The biggest hurdle is that WoodlandsPoint Fund Family is Cogent’s first fund. Cogent is trying to get around its lack of track record by touting the fund’s attractive structure and explaining that its three strategic partners, which he declined to name because negotiations with one of them are still pending, each have more than 25 years of experience. The partners will help source deals and will manage the parcels of land day to day.