Our Alternative Investment Report (AiR) series includes unique insight and in-depth analysis on a wide range of alternative investment sectors. Our latest report covers Forestry and examines the global forestry sector from a retail investor’s standpoint. The focus is on the investment products where investors can get exposure to the sector through investing directly, via a corporate element or through collective investment schemes.
As with all of the reports in the AiR series there is a comprehensive register comprising 83 investment products – 58 directly held, 4 investments with a corporate element and 21 collective investment schemes. This is the only known register where you can view and compare such a large cross-section of forestry opportunities available to retail investors.
Scope
Since 2008 there has been a marked increase in the number of investment opportunities for retail investors to gain exposure to the sector, with 21 new product launches in 2009 alone. Despite increased regulatory scrutiny and investment activity in recent years this sector is not particularly well covered by the investment analyst community.
The report considers the benefits and risks of forestry as an investment, such as providing diversification, a hedge against inflation and uncorrelated returns – UK forestry has achieved an annualised total return of 17.7% over the past five years. However, several investments are opportunistic and can promise outlandish returns many years into the future – investors need to be cautious.
Detailed due diligence and market knowledge is vital for anyone advising on forestry investments.
The report provides information on several key topics in the forestry sector and builds a framework of knowledge from which to advise on. Included is a detailed review of the different investment structures available and the regulation surrounding promotion, sale and safeguards, as well as the main points for advisers to consider when undertaking their research and due diligence of potential investments. A survey of some of the largest investment providers has highlighted a number of market trends, for example 59% of investments are valued in the local currency, exposing the investor to exchange rate fluctuations.
The unique investment register provides the basis for a large amount of analysis, findings and key trends on the retail investment opportunities available in the sector. The most common return on investment advertised from retail investment products is 17.76% per year, which is extremely high compared to mainstream investments but is likely to involve a large amount of risk and should be considered a long-term investment. Collective investment schemes have the lowest minimum investment requirements which can enable investors to allocate a small proportion of their portfolio to forestry.
Purpose
The report is aimed at financial advisers, professional intermediaries, pension operators, investment providers, sophisticated investors and other market practitioners who have an interest in forestry.
It does not provide recommendations but does aim to be subjective and highlight areas of concern and potential opportunities in the sector. This is achieved through extensive background research and detailed analysis of recent trends and developments in the sector, alongside highlighting the pitfalls to avoid when considering this asset class.
The overarching purpose is to aid readers with their knowledge and understanding of the sector and to help them make informed decisions about their or their clients’ exposure to forestry.
How to access the report
This accredited investment report on forestry is free for subscribers through our reports page or available to purchase for £195 including VAT by clicking here.
Should you be interested in a low cost monthly subscription to gain access to all of our AiR reports, articles, videos and accredited training on alternative investment please visit our subscriptions page.