Guernsey-based Phaunos Timber Fund, which has a net asset value of US$419m, blamed foreign exchange and valuation losses for the poor economic performance.
Phaunos recently fired the fund’s investment manager, FourWinds Capital Management, and has now appointed Sir Harry Studholme as executive chairman as an interim measure. Sir Harry is also chair of the UK Forestry Commission.
The losses follow a bad year in 2012, when Phaunos said it was US$43.2m in the red.
Unrealised foreign exchange losses totalled US$25.4m, while unrealised valuation losses were U$25.2m.
“Despite improvements in cash flow from our harvesting assets, a continued recovery in US and Asian timber markets and the realisation of significant cost reductions, the overall results for the full year were disappointing,” said Mr Studholme.
“Currency fluctuations and soft timber pricing continued to put downward pressure on valuations in our Brazilian investments whilst reappraisals adversely affected parts of our portfolio exposed to East Africa and China.”
Phaunos intended to increase its focus on disposing non-core assets. The company’s investments are located in North America, South America, Africa, Asia and Australasia.
Its remit is to provide shareholders with long-term returns through its portfolio of timberland and timber-related investments.
