Given the recent volatility in global stock markets, investors are looking towards commodities for security. Tropical forestry offers the ideal diversification from real estate and equity portfolios, providing a non-volatile market with high long-term returns on investment and a low risk-to return ratio.
- Environmentally conscious: sustainable forestry gives a unique opportunity to do something healthy for the planet whilst accruing a healthy capital gain.
- Long-term, stable investment: with long growth periods and minimal demand / supply fluctuations, forestry offers stable long term return projections.
- Low entry levels: Forestry investments require little capital (compared to real estate) and being in a stable Un-leveraged market, offer more dependable less volatile returns.
- Value rises with maturity: As trees grow, their marketable timber volume increases at a high rate, as does the woods’ value.
- Little affected by macroeconomics: Irrespective of which government is in power or global currency fluctuations, inflation and interest rates, the long-term factor of forestry and its fundamental applications produce a more constant growth rate.
- Hedge against real estate & equity portfolios: For the reasons above, forestry’s stability makes it the perfect portfolio hedge against more volatile markets.
- Flexible exit dates: with a range of harvest dates forestry investments have strong exit strategy flexibility.
- Potential tax advantages: such as SIPPs or CGT rollover relief, depending on project location and structure.
- Demand & supply: Global consumption of tropical hardwoods has multiplied nearly 25 times in the last 4 decades.
- Around 40m acres of tropical forest are being destroyed each year and not being replaced.
- Future carbon credit market: some reforestation projects may be applicable for future carbon accreditation depending on location and project management.
Key Investment Points:
Buy back option after 5 years with;
- Low entry level of £3,450
- Fully managed (your choice of manager)
- Investment is expected to return 11% percent per annum capital growth
- Thinning process year 6, 10, 15 which should yield a return of 5-10%
- Managed by the leading forestry management company in Brazil (The Preferred Manager)
- SIPP approved