Singapore owns 5% of Michigan’s Upper Peninsula. Its wealth fund bet on timber

• The Government of Singapore Investment Corporation owns more than 540,000 acres of land in Michigan’s Upper Peninsula
• The $800 billion sovereign wealth fund is the single largest owner of foreign agricultural land in Michigan
• Its complex corporate structure shows how landholders can easily mask their ownership

The government of Singapore owns more than 5% of all land in Michigan’s Upper Peninsula, according to federal records obtained by Bridge Michigan, making it the largest known foreign owner of agricultural land in the state. 

The Government of Singapore Investment Corporation, a state-owned sovereign wealth fund known as GIC, is listed in federal disclosures as the sole owner of more than 540,000 acres of Upper Peninsula forestland, much of which has active timber harvesting operations. 

The ownership of the land, which includes a sixth of all land in Gogebic County, along the Wisconsin border, has not previously been reported. 

It would not have become public, either, if the Rohatyn Group, a global private equity firm that manages the land, had limited their disclosures to what’s called for under federal rules — “three tiers” of ownership.

“These guys went out of their way to explain what they were up to,” said Patrick Schena, an expert on sovereign wealth funds and professor at Tufts University. “Not everyone may be motivated in the same way.”

Bridge sought the records through a Freedom of Information Act request as the state Legislature began to scrutinize foreign land ownership. 

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A proposal approved in May by the Republican-led Michigan House would bar entities from “foreign countries of concern” — China, Cuba, Iran, North Korea and Russia — from purchasing agricultural land in Michigan. 

Current land owners from those countries would have to register with the state, but Singapore, a small but economically powerful city-state with close ties to the US, is not among them.

The land owned by GIC provides an example of how major foreign investors can leverage the complexity of the international financial system, however, and obscure their true ownership by using a series of nested shell companies.

Mathew Collin, a senior researcher at the EU Tax Observatory, told Bridge Michigan in a prior interview the House proposal to ban foreign land ownership from certain countries “sounds like it might be fairly easy to evade,” without a robust way of tracking down ownership and strong enforcement mechanisms.

US Department of Agriculture (USDA) records illustrate a serpentine trail of seven shell companies between the five Michigan limited liability companies (LLCs) that own the land and GIC, the sovereign wealth fund. 

Over a period of two months between 2021 and 2022, GIC spent more than $450 million to purchase the land from other companies controlled by The Rohatyn Group, which had obtained the land in 2017 from another private equity firm.

“Even when these guys are trying to be transparent, by virtue of the gyrations that they go through to acquire a piece of timber property, even that can be non-transparent,” Schena said.

GIC did not return repeated requests for comment on their ownership of the land.

Other foreign land owners

The Singapore wealth fund is not the only major foreign owner of agricultural land in Michigan, but it appears to be the largest. 

Next on the list: Manulife Investment Management, a major Canadian multinational insurance and investment company that owned 323,000 acres in UP as of 2023, according to the USDA. 

Another major landowner in the UP, Lake Superior Land Co. owns 141,000 acres and has reported ownership based in the British Virgin Islands. It’s a popular offshore tax haven that readily disguises the identity of companies’ owners. The United Kingdom-controlled territory has missed deadlines to improve its own corporate transparency practices.

According to federal data, more than 1.9 million acres of the roughly 28 million acres of agricultural land in Michigan is tied to substantial foreign interests, though watchdogs have raised concerns about the reliability of the information.  

The interest in foreign agricultural land ownership comes amid warnings by some GOP leaders that Chinese firms or the government will try to purchase wide swaths of US farmland. No evidence has emerged of Chinese companies doing so in Michigan. 

Sovereign wealth funds are government-owned firms that invest assets to finance government bonds, build financial reserves or support social programs like pension systems. Singapore’s GIC is one of the world’s largest, with a recently estimated $800 billion in assets under its control. GIC doesn’t disclose the total value of its assets or the individual assets it owns.

There are good reasons to invest in timber, Schena said, noting it’s a relatively popular investment among sovereign wealth funds, as it’s a relatively stable investment insulated from fluctuations in the broader stock market and can boost a fund’s environmental bona fides.

Sovereign wealth fund ownership of US real estate is not uncommon, either. There are highly-publicized examples of SWFs acquiring prominent pieces of the Manhattan skyline, or an Abu Dhabi-affiliated SWF’s controversial farming of alfalfa in water-scarce Arizona.

GIC’s investment in Michigan appears to represent the largest publicly reported purchase of agricultural land by a foreign sovereign wealth fund to date in the US.

State Sen. Ed McBroom, a Republican who represents most of the Upper Peninsula, said he does not think the region is “threatened by Singapore and by Singapore's ownership. 

“I'm concerned, though, about what drives this ownership and investment,” McBroom told Bridge Michigan. 

“It certainly seems a no-brainer to me that these things ought to be far more transparent and not have to go through multiple shell company layers in order to get down to who's the owner.”

The paper trail

GIC is owned by the state of Singapore and its board is led by current and former government officials. 

The fund’s ownership paper trail in Michigan is long and winding: The LLCs that operate in the UP, called variations of Sage Timber and Verdant Timber, are owned and controlled by Delaware-based corporations, which are in turn controlled by a series of two corporations in the Cayman Islands. Those corporations are controlled by another company in Delaware, and pass through another two companies in Singapore before GIC (Ventures) Pte. Ltd. is listed as the “sole shareholder.”

“The long chain of intermediaries illustrates how opaque corporate structures and limited reporting requirements make it hard to get a clear picture of foreign ownership,” David Ortega, a Michigan State University professor who has researched foreign ownership of agricultural land, told Bridge.

The Rohatyn Group had owned the land since 2017, when it completed the purchase of GMO Renewable Resources, another private equity firm which had previously owned the land. The transfers are part of a broader trend in the UP, where logging tracts, traditionally owned by wood product companies, are increasingly sold off to investment firms. 

A substantial portion of the land, however, was also purchased from the Keweenaw Land Association at the end of 2021. 

The company announced the sale at the time, but it did not name the buyer, telling shareholders in November 2021 that its timber assets had been sold “to an entity managed by a non-affiliated large institutional timberland investment manager in an all cash transaction.”

The land association, a public company, still owns the mineral rights to much of the land.

“There are probably tax reasons why” GIC chose such a complex corporate structure, Schena noted. But despite that complexity, he commended the owners for being “very transparent.” 

Some of the land brought GIC major dividends just months after the purchases, according to records, as the fund has sold off a smattering of small tracts.

In May 2022, Verdant Timber Cub LLC, one of the GIC-owned companies, sold 39 acres in Keweenaw County to the Dorothy M. Peterson Irrevocable Dynasty Trust. 

The company reported paying $37,500 when it bought the three Allouez Township parcels on the shore of Lake Superior. The selling price, however, was $2.4 million.

Singapore and the US have a strong diplomatic and economic relationship. The US state department reported the US has routed hundreds of billions of dollars in investment through the small city-state and the US is its largest foreign investor.

GIC, which is restricted to investing outside of Singapore, said in their most recent annual report that 39% of their investments were in the US.