Wholesale
Forest Enterprises

Ngatawhai Group Forest Investment

Managed Investment Scheme

Register Interest
Transaction Size
NZD 2,917,800.00
Share Price
Minimum Investment
NZD 9,726.00
Issue Type
Managed Investment Scheme
Sector
Forestry

Ngatawhai Group Forest Investment

Forestry Seminar and Land Visit

Forestry seminar: 27 Mar 2020, 12:30pm-1:30pm

BNZ Partners Business Centre, Level 8 Deloitte Tower, 80 Queen Street, Auckland

Forest Enterprises are experienced forestry managers. For nearly 50 years, they have been helping Kiwis grow their wealth through affordable direct investments in some of New Zealand’s most exceptional Radiata pine plantation forests, and by expertly and sustainably managing the forests through their lifecycle. 

Join directors Bert Hughes and Gordon Wong to talk about their approach to forestry investment and for Q&A.

Click here to book for this free event: https://forestry-investment-seminar-with-forest-enterprises.lilregie.com/booking/attendees/new

Forest visit: 29 Feb 2020, 10:00am-2:30pm

If you’d like to see the forest up close then join Forest Enterprises for a tour. Click here to book for this free event: https://event-6480-d494.lilregie.com/booking/attendees/new


Scheme Overview

Forest Enterprises’ latest investment opportunity is the Ngatawhai Group Forest Investment. It is a managed investment scheme (MIS) owning 627 stocked hectares of superior forestry land, plus 200ha of permanent native bush and wetland in the Wairarapa.

The Ngatawhai forest is a single block of sustainable forestry in the Wairarapa, Forest Enterprises’ home region. This is existing forestry land of a high quality. Forest Enterprises managed this land for the last 3 decades. Productivity is proven with good returns from the first crop.

The Ngatawhai forest is ready planted for its second rotation with genetically superior tree stock (projecting harvest at age 26). Benefits of second rotation forestry also include that the land condition has improved for pine growth, and harvest roads and log processing areas are already in place for the next harvest. All of these enhance the return on investment.

Harvest of the plantation crop begins in about 19 years, as the forest has stands already aged 7 years. A return on investment will be dependent on log prices during harvest, sale of the land and any replanted trees at that time. See below for investor contributions and returns.

Forest Enterprises has been providing retail forestry investments for nearly 50 years. This is our second new offer in the last 12 months, there is demand for this sort of investment.

Carbon

This land does not qualify to earn income from carbon. However, the trees still perform the same environmental function of sequestering atmospheric carbon.

Forest Enterprises’ managed forestry sequesters an average of 35.9 tonnes of CO2e (carbon dioxide equivalent) per hectare per year until it reaches age 26. Therefore, any anyone investing 200 shares in the Ngatawhai Investment, equivalent to 2.09 hectares, will sequester an average of 75 tonnes of CO2e each year.

Investor Contributions & Returns for the Ngatawhai Investment

Forestry investment is contributory, with tax deductions available each year against investors’ total income.

Investors pay an initial upfront investment cost upon application, and then meet annual instalments (calls) each year until harvest for the ongoing forest and investment management costs. The initial investment and annual contributions are set at an affordable level for retail investors.

  • Initial investment: Minimum initial application cost is $9,726 for 200 shares plus projected annual contributions (see below).
  • Additional shares may be purchased at $48.63 per share.
  • Projected annual contributions: Calls are projected to average around $1,011* per year for 8 years, then drop to an average of around $291* per year until harvest commences around 2038. The first call is 30 June 2020.
  • Projected total investment: $20,797*
  • Projected gross return: $129,060* (Harvest period (income) 2038-2046)
  • Projected gross IRR:  9.33%*
  • Annual investor administration fee $60 payable once per year per shareholder in this investment

* Per 200 shares, based on 2% per annum inflation and Forest Enterprises’ 36-month log price series to 30 June 2019. Refer Cashflow on pages 28-29 of the Ngatawhai PDS and other financial information in section 6 from page 25.

To Register Interest

For further information, including the Product Disclosure Statement, click on the "Register Now" button. We will provide you access to that document and you will be connected with the advisor to the issue.

Other documents relevant to the offer are available to view at www.companiesoffice.govt.nz/disclose.

Investment Structure

Ngatawhai Group Forest Investment is a registered MIS under the Financial Markets Conduct Act 2013, structured as a forest-owning limited partnership (LP). Investors buy shares in the LP and become a part-owner of the forest with other investors. The LP investment structure provides investors with limited liability and ultimate tax deductibility.

A Forest Enterprises investment is a direct investment in land and trees for one rotation of the forest crop, which for the Ngatawhai investment is about 26 years.

Forest Enterprises, as the licensed MIS manager, runs the business of the investment including forest management.

Why invest in forestry?

Forest Enterprises clients choose to invest in quality forestry:

  • To diversify their investment portfolio with a land-based asset
  • To change the weighting of their portfolio towards sustainability
  • To directly invest in a renewable resource that reduces atmospheric carbon
  •  To play a part in growing New Zealand’s strong forestry economy
  • To supplement retirement income
  • For future generations of their family
About Forest Enterprises

Forest Enterprises is one of New Zealand’s leading forest investment companies and is unique in providing both forest and investment management services.

The Kiwi company has a track record over 47 years of helping more private investors grow their wealth via New Zealand pine plantation forestry. Forest Enterprises specialises in providing retail forestry investment opportunities and was the first in New Zealand to do so when it was founded in 1972 in Masterton, New Zealand.

On behalf of its 6,600-plus investors, Forest Enterprises manages more than 20,000 hectares in the Wairarapa, Gisborne and Hawkes Bay on the east coast of New Zealand’s North Island. It has around $450 million of assets under management. Forest Enterprises provides the benefit of scale and proven management experience.

Forest Enterprises has remained a locally owned and operated business, still based in Masterton. It now has an additional office in Gisborne city to locally manage its expanding harvest programme in the region. The company’s five shareholders are key managers in the business, and are professionals in technical forestry, harvesting, accounting and law.

Risks

No investment is without risk. With forestry, risks can include risk to the crop – for example from fire, wind throw or disease. As a commodity, the price of logs can go up or down meaning returns could fluctuate during harvest. However, time in the market is a positive and this is achieved by Ngatawhai harvesting over 8-9 years.

There’s extensive insurance over Forest Enterprises’ managed forests, and the manager works on investors’ behalf to help mitigate any risks. A financial adviser can help you determine if forestry investment is suitable for you.

To Register Interest

For further information, including the Product Disclosure Statement, click on the "Register Now" button. We will provide you access to that document and you will be connected with the advisor to the issue.

Other documents relevant to the offer are available to view at www.companiesoffice.govt.nz/disclose.

 

The issuer of the shares in Ngatawhai Group Forest Investment is the licensed Manager, Forest Enterprises Limited, and the offeror is Forest Enterprises Growth Limited (a related party of the Manager). Forest Enterprises Limited is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds) which are primarily Invested In forestry assets.

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