Types of Clients
PTMI provides investment advisory services to the Fund, an unregistered private investment
company. The PFI Fund is closed to new investors and will not accept new investors in the future.
Methods of Analysis, Investment Strategies and Risk of Loss
PTMI’s strategy involves an integrated analytical approach to timberland portfolio management
coupled with a disciplined approach to property management. PTMI focuses its acquisition effort
on properties which it believes will have a higher than average return. PTMI actively manages the
Fund’s assets to ensure that they are weighted towards investments that are expected to produce
above average returns while periodically divesting of components that diminish economic
performance. PTMI employs this screening process during the acquisition phase, identifying under-
performing portions of acquisitions so that they can be divested before they have a deleterious effect
on long-term investment performance. PTMI also routinely repeats the screening process, plans
divestitures accordingly, and integrates these plans into the annual budgeting process. As a result,
PTMI attempts to gradually transform its acquisitions into concentrated holdings of high-value or
high value-growth properties. Properties retained in the portfolio are managed for production of
high-quality saw timber. Properties intended for divestiture are managed extensively while awaiting
sale.
All investing involves a risk of loss and the investment strategy offered by PTMI could lose money
over short or even long periods. An investment in the Fund may be deemed a speculative investment
and is not intended as a complete investment program. It is designed for sophisticated investors
who fully understand and are capable of bearing the risk of an investment in the Fund. No guarantee
or representation is made that the Fund will achieve its investment objective or that limited partners
will receive a return of their capital.
Risks and potential conflicts of interest include, but are not limited to, the following:
There are numerous risks associated with investments in the real estate industry and the possibility
of partial or total loss of capital exists.
The Fund is subject to all risks incidental to the ownership and financing of real estate and interests
therein, many of which relate to the general illiquidity of real estate investments. These risks
include, but are not limited to, changes in general or local economic conditions, increased
competition, changes in interest rates and the availability of permanent mortgage financing which
may render the purchase, sale or refinancing of a property difficult or unattractive and which may
make debt service burdensome, changes in demand for real estate generally and in specific areas,
changes in real estate, environmental, or zoning laws, increases in real estate taxes, floods,
earthquakes, hurricanes and other acts of God, acts by terrorists, and other factors beyond the control
of PTMI. The illiquidity of real estate investments may also impair the ability of PTMI to respond
promptly to changing circumstances.
There is no liquid market for real estate and real estate-related investments. Estimated market values
may not be readily ascertainable. In addition, there may be significant disruptions in the global
capital, credit, and real estate markets. These disruptions may lead to, among other things, a
significant decline in the volume of transaction activity, in the fair value of many real estate and real
estate- related investments, and a significant contraction in short-term and long-term debt and equity
funding sources. The decline in liquidity and prices of real estate and real estate-related investments,
as well as the availability of observable transaction data and inputs, may make it more difficult to
determine the fair value of such portfolio investments. As a result, amounts ultimately realized by
the Fund from investments sold may differ materially from the fair values presented to investors.
PTMI can provide no assurance that any property will be profitable. Problems and delays may be
encountered after the purchase, including those related to decreased timber demand, delayed
liquidation schedules, new environmental regulations, previously unknown environmental
conditions, and other unforeseen circumstances.
PTMI performs monthly valuations of the assets of the Fund using methods detailed in the Fund’s
governing documents. Any such valuations, however, are a subjective analysis of the fair market
value of an asset and require the use of techniques that ultimately provide no more than an estimate
of value. Valuations may result in adjustments of the Fund’s aggregate fair market value.
Accordingly, there can be no assurance that the Fund’s aggregate fair market value, as calculated
based on such valuations, will be accurate on any given date, nor can there be any assurance that
the sale of any asset would be at a price equivalent to the last estimated value of such asset.
Additional details about the methods of analysis, investment strategies, and risks associated with
the Fund are set forth in its governing documents.