Phaunos Timber Fund : Timber Fund may benefit from lumber tariffs

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Phaunos Timber Fund Limited ­ PTF Released 09:00 15­May­2017

RNS Number : 0586F

Phaunos Timber Fund Limited 15 May 2017

News release 12th May 2017

Timber Fund may benefit from lumber tariffs

TIMBER FUND SET TO BENEFIT FROM TRUMP'S IMPOSITION OF TARIFFS ON CANADIAN TIMBER

US trade dispute with Canada highlights the importance of well‐diversified por㤂olio exposure

Phaunos, the specialist closed‐ended 鰄mberland and 鰄mber‐related fund, managed by Stafford Capital Partners, appears well posi鰄oned to benefit from the Trump administra鰄on's imposi鰄on of new an鰄‐subsidy tariffs on Canadian saw鰄mber. The move escalates a long‐running trade dispute between the two countries, which is based on claims by US producers that their Canadian compe鰄tors are effec鰄vely subsidized. Their argument is that Canadian sawlogs are grown on public land and their pricing reflects an administra鰄ve fee, whereas in the US most sawlogs are grown on private land and pricing is market driven.

The new tariffs were announced by Trump at a White House gathering of journalists ‐ shortly before the Commerce Department said it would impose countervailing du鰄es ‐ and range from 3% to 24.1%. Their introduc鰄on follows the expiry of the 2006 So韖�wood Lumber Agreement, which placed restric鰄ons on the volume of saw鰄mber that Canada could export to the US.

The tariffs will impact some $5 billion worth of Canadian so韖�wood lumber imports, represen鰄ng as much as 31.5% of the total US market, according to US Commerce Secretary, Wilbur Ross.

Lumber prices in the US have risen sharply over recent months, as Canadian suppliers priced in the du鰄es, which they correctly an鰄cipated would be levied retrospec鰄vely.

Click on, or paste the following link into your web browser, to view the associated PDF document

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Shareholders in the US$ 300m Phaunos Timber Fund, which owns no forestry or 鰄mber processing assets in Canada, appear set to benefit from these events.

Marek Guizot, Investment Manager at Stafford Timberland, which has managed the Phaunos Timber Fund since July 2014, expects to see some vola鰄lity in saw鰄mber prices un鰄l the tariff levels are resolved, but says the new "floor price should be above 2016 levels", and will "benefit those with US exposure."

US housing starts are steadily increasing following the 2009‐2011 crisis and Stafford expect to see the market con鰄nue its steady growth over the next five years, fueling the demand for so韖�wood lumber. However, the specialist 鰄mber asset management firm believes Canada's share of the US market will decline as a result of reduced harves鰄ng in its own forests and the imposi鰄on of these new tariffs. "There is definitely scope for domes鰄c US saw鰄mber produc鰄on to be increased, but we also foresee an increase in imports of lumber to the US from both Europe and La鰄n America", says Guizot, "and more trade missions the like of the US Na鰄onal Associa鰄on of Home Builders' visit to Chile last year, as the States seeks to iden鰄fy alterna鰄ve, affordable sources of supply."

Phaunos set to benefit

A listed global 鰄mberland company, Phaunos is quoted on the main London Stock Exchange, offering UK investors low‐cost and liquid exposure to the 鰄mberland asset class. The Fund has seven underlying investments, across three con鰄nents, and interests in more than 150,000 hectares of sustainable planta鰄ons. This provides well‐diversified market exposure, an important feature in the light of events such as the US trade dispute with Canada.

The Fund's greatest exposure to US so韖�wood lumber markets is through its investment in Aurora Forestal in Uruguay. Approximately half of Aurora' lumber produc鰄on is exported directly to the US. Increasing US lumber prices, and growing US appe鰄te (or need) for alterna鰄ve lumber suppliers, can only benefit Aurora and Phaunos going forward.

- ENDS ‐ Journalists seeking further informa鰄on and/or who wish to speak with Phaunos should contact:

Gordon Puckey Managing Director Phoenix Financial PR

[phone]

gordon@phoenixfinancialpr.co.uk

NOTES TO EDITORS

1. About Phaunos Timber Fund Limited

   Established in 2006, Phaunos Timber Fund Limited ("PTF" or "the Company") invests in a concentrated, but diversified por㤂olio of 鰄mberland and 鰄mber‐related investments. The Company seeks to provide Shareholders with a៣�rac鰄ve investment returns over the longer term, largely in the form of capital apprecia鰄on, but with some income. As at 31 December 2016, the Fund managed US$ 301.3m of 鰄mberland assets.

   PTF is a Guernsey‐domiciled authorised closed‐ended investment scheme, authorised by the Guernsey Financial Services Commission under sec鰄on 8 of The Protec鰄on of Investors (Bailiwick of Guernsey) Law, 1987 (as amended) and the Authorised Closed‐ ended Investment Schemes Rules 2008 made thereunder. The Company's ordinary shares are traded on the main market of the London Stock Exchange.

   www.phaunos鰄mber.com

   The Company's 鰄cker is PTF.

2. About Stafford Capital Partners Limited

Established in 2000, Stafford Capital Partners ("Stafford") is a leading private markets investment group. It has specialist investment teams working across Real Assets, Private Equity and Credit, and with offices in Aus鰄n, Boston, Hanover, London, Sydney and Zurich, has a truly global presence. As at 31 March 2017, Stafford has more than US$4.8 billion under management and advice, with US$2.3 billion in 鰄mberland investments. Stafford was appointed as the Manager of Phaunos on 1 July 2014.

Stafford Timberland provides fund management and advisory services to ins鰄tu鰄ons seeking global 鰄mberland exposure; this is achieved through pooled investment vehicles and co‐investment opportuni鰄es in transac鰄ons (which are some鰄mes larger than the capacity of the primary fund). Stafford's pooled funds offer globally diversified por㤂olios of 鰄mberland assets, and are ac鰄vely managed to take advantage of developing market trends. Stafford presently manages 鰄mber investments in Australia, Brazil, Canada, Central America, Chile, New Zealand, the US and Uruguay.

Stafford Capital Partners is a member of the 'Principles for Responsible Investment' (PRI); these Principles are an interna鰄onally agreed upon framework, designed to help ins鰄tu鰄onal investors to incorporate Environmental, Social and Governance (ESG) considera鰄ons into their investment decision‐making and ownership prac鰄ces. The PRI has acknowledged Stafford as having incorporated a solid framework for ESG considera鰄ons into its investment decision process.

www.staffordcp.com

This information is provided by RNS

The company news service from the London Stock Exchange

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Timber Fund may benefit from lumber tariffs ‐ RNS