Cogent Partners_Why Timber

8/9/2019 Cogent Partners_Why Timber

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Investment Experience

Corrigan, Texas, USA

Acreage: 21,853

Species: loblolly pine

Development stage: balanced ageclass for sustainable yield

Markets: sawtimber and pulp

Georgia/Florida, South AtlanticStates, USA

Acreage: 29,900

Species: diverse pines

Development stage: balanced ageclass for sustainable yield

Markets: sawtimber and pulp

Tarrangower, New South Wales, Australia

Acreage: 21,163

Species: eucalyptus and non-commercial

Development stage: now being planted

Markets: sawtimber, carbon credits andbiodiversity conservation

Renwick, New Zealand

Acreage: 3,200

Species: radiata pine

Development stage: mid-rotation

Markets: log exports

Pahala, Hawaii, USA

Acreage: 3,700

Species: eucalyptus



Pinnacle, Hawaii, USA

Acreage: 4,500

Species: eucalyptus



Minas Gerais, Brazil

Acreage: 29,300

Species: eucalyptus

Development stage: bare-landproperty

Markets: production of charcoal to thepig iron industry

Tocantins, Brazil (3R)

Acreage: 25,700

Species: eucalyptus

Development stage: bare-landproperty

Markets: production of charcoal to thepig iron and silicon metals industrieswith exposure to developingpulp/paper markets



Why Timber?

Attractive Long Duration Returns

Stable Investment Fundamentals - majority of return generated from biological growth

Provides Portfolio Diversification – low correlation with other asset classes

"The outlook for timberland investors is attractive. Supplies are decreasing, demand is increasing and prices are expectedto continue to appreciate in real terms. Declining supplies are a result of competing uses for forestland, a lack of

reforestation and public pressure to curtail timber harvest on federal lands. Higher demand for timber results from anexpanding global market for wood products and a shifting emphasis to renewable resources. Increasing global demandfor forest products is expected to continue due to worldwide demographic trends."

- Quote from Forest Investment Associates



Timber Returns

Timber has provided attractive unlevered returns on true long duration assets.

Asset 2009 2008 2007 5 Year 10 Year Since Inception*

NCREIF Timber -4.8% 9.5% 18.4% 10.9% 7.3% 14.1%

S&P 500 26.5% -38.5% 3.5% -0.1% -1.2% 7.8%

Private Equity 12.3% -20.9% 18.1% 5.5% 4.0% 11.2%

NCREIF Total Property -16.9% -6.5% 15.8% 4.7% 7.3% 6.8%

* Timberland Index Inception was 1987



Timber Return Correlations

Timber has provided valuable diversification to other asset classes whileproviding an inflationary hedge.

NCREIF NCREIFCorrelations Timber S&P 500 Total Property Private Equity

NCREIF Timber 1.00 0.05 -0.05 0.15

S&P 500 0.05 1.00 0.18 0.68

NCREIF Total Property -0.05 0.18 1.00 0.32

Private Equity 0.15 0.68 0.32 1.00



Biological Growth Drives Return

Timber return are uncorrelated as biological growth accounts for the largest component of the return. Treesadd units of volume as they grow and the units become more valuable as they reach different product classes.

Components of Timber Return

*Based on Southern Yellow Pine

Value Per Tree

Documents

Cogent Partners_Why Timber