Investment platform Syndex has welcomed its first forestry offer to its marketplace. The fintech company commonly lists proportionally-owned assets in agriculture, horticulture and commercial property. Last week it widened its reach with an attractive investment opportunity for wholesale and retail investors in the forestry sector.
“It’s great to be able to offer our investors access to forestry, a commodity that is familiar with most New Zealanders and with a forest manager such as Forest Enterprises, whose longevity and capability is proven”, said Syndex founder Mike Jenkins.
The planting of the mid-90s is coming of age and having delivered strong returns for its investors, is releasing land for the next rotation and giving opportunity to succeeding generations.
“We believe this offer will be attractive to a wide range of investors. The inclusion of retail investors and the low minimum initial investment opens the gate for the young professional and those looking to boost their retirement savings”, said Jenkins.
George Verry, a Forest Enterprises investor (from the first rotation of planting) made his investment with retirement in mind. “I was attracted to the relatively low initial investment, lower risk offer that I hoped would supplement my retirement income as I didn’t have a superannuation fund.”
This offer could attract more than just a niche group as the demand in sustainable and environmental investments increase. A renewable resource, carbon storage, erosion control, water quality and biodiversity, all looks favourable on the ESG checklist.
This is a long-term investment (radiata pine takes 25+ years to mature), but if you had played the waiting game over recent decades you stood to benefit from an attractive ROI of 9.9% (ave. pre-tax)1. Naysayers will be quick to point out the risk of forecasting returns over such a long period with such unpredictability in politics, climate and economies. Like all investments, there are always risks and uncertainty to reconcile before signing up.
“There were risks to consider, but I was fairly confident that there would always be a big demand for wood and timber, as it’s such a versatile product. As time passed my confidence in Forest Enterprises grew, trusting that they were managing the forests in the best way”, said Verry.
In 2001, Forest Enterprises was first in New Zealand to harvest first-rotation investment forests.
“We expect enhanced returns from our next rotation”, said Forest Enterprises CEO Bert Hughes. “Conditions in the forests are superior, and our four decades of experience means we manage risk and opportunity with confidence and are more definitive in our projections.”
Forest Enterprises’ current investment opportunity is the Wairarapa Group Forest Investment, a managed investment scheme (MIS) owning 970-hectares of superior forestry in the Wairarapa. As second rotation forests they are conditioned for pine with established harvest infrastructure in place. Forest Enterprises is currently the only MIS manager offering retail forestry investment.
To view the offer on the Syndex marketplace click here.
1 ANZ Agri Focus, March 2017
About Syndex: Syndex’s is an online investor portal for real assets and private equity – its focus is to bring transparency, liquidity, independence and price discovery to the private economy for any proportionally-owned asset such as fractions of agricultural assets, shares in private equity and commercial property syndicates.
About Forest Enterprises: Forest Enterprises is a leading full-service forest management and investment services company. Since 1972, it has helped people grow their wealth through affordable direct investments in some of New Zealand’s most exceptional radiata pine plantation forests, and by expertly managing these forests from establishment to harvest. Forest Enterprises have over 20,000 hectares under management on behalf of 6,600+ individual investors. 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.
Ross Verry is CEO of Syndex and a shareholder. The views expressed above are purely his own. Please assess and research all your investment.