CITY OF CLEARWATER FINALS PRESENTATION - 10-8-10SUCCESSFUL STRATEGIES = RMK TIMBERLAND GROUP
A R E G I O N S M O R G A N K E E G A N C O M P A N Y
October 8, 2010
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AGENDA
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RMK Timberland Group
We see the forest. And we see the trees.
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ORGANIZATION & ASSETS
INCEPTION: 1981
OFFICES: Atlanta, GA; Athens, GA; Columbia, SC; Columbus, OH; Dallas, TX; Glasgow, KY; Huntsville, AL; Richmond, VA; Tallahassee, FL; Winston-Salem, NC; Washington,
D.C.; Montevideo, Uruguay
STRUCTURE: Business Unit of Regions Morgan Keegan.
CURRENT ASSETS: $ 2.008 billion – 9 Commingled Funds
and 15 Separate Accounts
LIQUIDATED
ASSETS: $ .437 billion
RMK Timberland Group Profile as June 30, 2010
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RMK TIMBERLAND GROUP
Charlie Daniel, CF
President & CIO
Committees:
Investment
Appraisal Review
Acquisition
Technical
1 Staff Mgr.
6 Admins.
1 Senior Forest Analyst
1 Junior Forest Analyst
1 Admin Assistant
Jon Caulfield, Ph.D., RF
Research & Analysis
Michael Shearer, CF
U.S. Investments &
Portfolio Management
Jim Webb
Jim McBride
Business Development
Jon Callaghan
Portfolio & Real
Estate Manager
Mark Bice
Domestic
Acquisitions Manager
Joyce Niggley, CFA
Portfolio
Manager
Greg Williams, RF
Portfolio
Manager
1 Investment Foresters
Phil Weigel, RF
Northern
Regional Manager
Jeanette Sullivan
Director of
Financial Operations
2 Accounting Managers
6 Accountants
1 Admin Assistant
1 Investment Foresters
Lucia Basso
Uruguay
Country Manager
Bob Sinclair, CF
Western
Regional Manager
1 Acquisitions Forester
Steve Krietemeyer
Brazil
Operations Manager
1 Marketing Associate
Robert Hagler
International
Portfolio Manager
David Preston
South African
Operations Manager
Scott Ashworth
Central/Eastern Europe
Operations Manager
Jeff Newsome, RF
Southern
Regional Manager
Bruno Folegatti
Brazil
Country Manager
Jeff Mayo, Ph.D.
Asset Management &
Administration
1 Admin Assistant.
1 Investment Foresters
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ORGANIZATION
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ASSETS MANAGED
RMK Timberland Group Profile as of and for the periods ended June 30, 2010
TOTAL
$2,008
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Special accounts:
Bosques del Sur, LLC (Lord Baltimore)
LJR Timber Holdings, LLC
RCF Timber, LLC
City of Danville
RMK TIMBERLAND GROUP
DOMESTIC PROPERTY SUMMARY BY STATE JUNE 30, 2010
Total Acres (Hectares):
1,274,446 (515,750)
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RMK TIMBERLAND GROUP
SOUTH AMERICAN PROPERTY SUMMARY JUNE 30, 2010
Total Acres (Hectares):
286,576 (115,973)
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RMK TIMBERLAND GROUP
EUROPEAN PROPERTY SUMMARY JUNE 30, 2010
Total Acres (Hectares):
1,976 (800)
Hungary
1,976 (800)
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PERFORMANCE & CLIENTS
ACTIVE ACCOUNTS COMPOSITE RETURN AS OF 06.30.10 (BEFORE FEES)
YEAR TO DATE 1 YEAR 3 YEARS 5 YEARS 10 YEARS SINCE INCEPTION
4.40% 0.74% 3.84% 6.98% 6.45% 9.81% (16.25 Years)
CLIENT BASE
50 Investors
23 Public Funds, 20 Corporate, 3 Endowment/Foundation, 4 Private
RMK Timberland Group Profile as of and for the periods ended June 30, 2010
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REPRESENTATIVE CLIENT LIST
PUBLIC FUNDS CORPORATE FUNDS
Arkansas Teachers (2) ALCOA
City of Austin, TX Police (3) DTE
Dallas Police & Fire (2) Coca-Cola Enterprises (2)
Omaha School Employees Penn
Mutual (2)
San Antonio Fire & Police (2) Progress Energy
FOUNDATION & OTHER INTERNATIONAL FUNDS
American Red Cross Public Pension Fund: Netherlands
Cape Fear Memorial Fdn. Sampension
(3): Denmark
LJR Trust (2) ATP: Denmark
Kate B. Reynolds (2) Tredje AP-Fonden (3): Sweden
Clwyd: UK
Aquila: Germany
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COMPENSATION
Compensation Policy: align employees’ interests with interests of our clients
Investment Professionals participate in annual cash incentive bonus program
Incentive compensation
of the Portfolio Managers, Acquisition Team, and Operations Group members are tied to the performance of the Fund
Portfolio Managers: Largest piece of bonus tied to the funds they
manage
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Portfolio Strategy
We see the forest. And we see the trees.
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STAGES IN THE LIFE OF A FOREST
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TIMBERLAND INVESTMENT & MARKET REGIONS
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Data Source: Timber Mart South and Log Lines
Timber Markets
Timber Investment Regions
#
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TARGET INVESTMENT REGIONS
Target Forest Area: 1,626,223,505 has (~41% of forested area)
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International Capabilities
We see the forest. And we see the trees.
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SOUTHEAST PULP MILLS STUMPAGE BUYERS 1996
Total of 90 Mills
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SOUTHEAST PULP MILLS STUMPAGE BUYERS 2010
Total of 77 Mills
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MAJOR MANUFACTURING & PORT FACILITIES
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Traditional N. Hemispheric Trade
Evolving North-South Trade
CHANGING GLOBAL TRADE OF FOREST PRODUCTS
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“FAST GROWING PLANTATION REGION”
BECOMING A REAL PRESENCE
“Fast Growing Plantation” Region includes several countries in the southern
hemisphere
Characterized by fast tree growth and low raw material costs
Major new investments
by global manufacturers in production and processing
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PLANTATION GROWTH RATES
FGP REGION COUNTRIES VS. U.S. SOUTH
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A 100 Year Old Spruce/Pine
Forest in Oregon
A 26 Year Old Pine Forest
in US South
A 13 Year Old Eucalyptus Forest in Uruguay
CHANGES TO GLOBAL FOREST PRODUCT INDUSTRY
PARTLY DRIVEN BY GROWTH RATES
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2-MONTH-OLD EUCALYPTUS PLANTATION, MINAS GERAIS, BRAZIL
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6-MONTH-OLD EUCALYPTUS PLANTATION, MINAS GERAIS, BRAZIL
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12-MONTH-OLD EUCALYPTUS PLANTATION, MINAS GERAIS, BRAZIL
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HUNGARY ENERGY PLANTATIONS (4 MONTHS OLD)
Location: Western and Southern Hungary
Strategy: Leasing land and planting clonal hybrid Poplars on 3-year rotations. Trees harvested for biomass used in energy production
Estimated
Investment: €37 million
Estimated Return: 11%+ real, after in-country taxes
Timing: 800 ha planted by Sept 2010 with target of 3000 by December 2011
Poplar plantation in Maho, Hungary –
picture taken September 2010; trees planted May 2010
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POPLAR PLANTATION
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PLANTING
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HARVESTING
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RMK Global Timberland Resources Fund
We see the forest. And we see the trees.
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GLOBAL TIMBERLAND PORTFOLIO
Widely diversified global portfolio
Investments considered in the United States, Latin America, Southern Africa and Eastern Europe
Capture value from additional natural resources:
wind, water, carbon, and HBU
Plantations certified for sound management and sustainability
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GLOBAL TIMBERLAND PORTFOLIO
INVESTMENT STRATEGY & DIVERSIFICATION
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GLOBAL PORTFOLIO – TARGETED REGIONS
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FEES
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TIMBERLAND INVESTMENT OPPORTUNITIES
United States:
Niche markets, outside of the “traditional”
timber belt
Motivated/distressed sellers
Central & Eastern Europe:
New entrants to European Union have lower cost
structures
Little competition from other institutional investors
Central and Eastern Europe hit hard by economic
downturn
Focus on energy plantations; some traditional
forestry
Timberland values based on inefficiencies in
production, transportation and marketing
Strong regional projected growth in demand
South America:
Fast-growing eucalyptus and pine
plantations
Domestic and export markets
Eucalyptus grown for pulp/paper and pig-
iron industries
Pine grown primarily
for domestic and
export sawtimber markets
Southern Africa:
Focus on South Africa and Mozambique
Flat supply and growing demand in South
Africa and afforestation potential
in
Mozambique
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Summary
We see the forest. And we see the trees.
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SUMMARY
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DISCLAIMER
This Presentation is not an offer to sell securities. Any sale of securities in any Fund offered by RMK Timberland Group will be made pursuant to a Confidential Offering Memorandum,
Information Memorandum, or an equivalent legal agreement. These documents, along with ancillary documentation for any RMK Timberland Group Fund will be provided to you by RMK Timberland
Group. In particular, organizational documents will control the operation of Funds, and you should therefore review each document carefully before investing.
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Appendix: Performance Detail
We see the forest. And we see the trees.
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COMMINGLED FUNDS’ TRAILING YEAR PERIODS
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ACTIVE COMMINGLED FUNDS’ CALENDAR YEAR PERFORMANCE
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LIQUIDATED COMMINGLED FUNDS’ CALENDAR YEAR PERFORMANCE
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