Tag Archives: maralyn
Institutional Trees… A New Species?
June 14, 2013 Sustainable Asset Management (Investorideas.com renewable energy newswire) It has long been understood that trees are a very important part of our planet and they remain one of the few natural resources that touch all our lives on a daily basis, whether a piece of wood in the home, the floor we walk on, a book we are reading, or even the feint rustle of leaves in the air as we stroll along; we all benefit from trees. We need them, and yet we all know they are under threat. Despite the efforts over the years of governments, politicians, business magnates and even celebrities, the growing commercial demand for timber, crop land for food and biomass, combined with other demands on forest resources & related products, mean that large natural forests remain under serious threat; some of the most treasured species are in danger of extinction. More recently trees and timber have become a mainstream part of our everyday investments. Hedge funds and pension funds have long been investing in forestry & timber plantations along with their associated supply chains; these have even outperformed stock markets for over a century. During the last decade pioneering companies like Asia Plantation Capital have made plantations and trees more accessible to both large and smaller investors who can now buy plantations and have them managed on their behalf to reap the future returns from this amazing natural resource . In fact many analysts, the United Nations and a growing number of those same business magnates now agree on one common solution that always succeeds; “Show a man how to make money from a problem and let the money solve it”. One shining example of this is the threatened agarwood tree. Harvested in the wild to near extinction due to traditional uses now exasperated by modern trends and high global demand for fine fragrance and medicines produced from this rarest of trees and the natural oil it produces, Oud. Despite the fact it was made illegal to harvest in the wild by international convention (CITES) more than ten years ago, commercial demand today has the species as a wild natural tree teetering on extinction. A combination of science, research, practical experimentation and a huge amount of investment has been salvation for the agarwood tree, now a shining example of an international environmentally successful and commercial project which has the ability to; safeguard and protect the species; supply global demand in a sustainable way whilst generating revenue; guarantees the future of a rare species whilst benefiting the economies of fragile forest communities often dangerously driven to illegal logging simply to feed and care for their families. Asia Plantation Capital (APC) has not only become the market leaders in sustainable agarwood, along with other plantation industries such as teak, but also major campaigners, lobbyists and educators to the global markets on its importance. Sponsoring and supporting related industry events such as IFEAT (the International Federation of Essential Oils and Aroma Trades) annual conventions, and reintroducing the agarwood species to Sri Lanka where it had all but been wiped out in the wild by illegal loggers, as well as taking the largest promotional stand at the recent UN World Teak Conference held in Bangkok showcasing their advanced plantation monitoring systems. One company that has spotted APC, and more importantly studied and researched its agarwood plantation model, is Singapore based Sustainable Asset Management. After almost six months of due diligence, inspection visits, meetings with end users and Institutional Investors, Sustainable Asset Management (SAM) has developed what they believe is one of the most carefully structured and balanced forestry investment products available today for HNWI and institutional investors looking at exposure to the asset class as part of a risk balanced portfolio; that’s right, trees are now a risk assessed asset class! Adam Sprague, Head of Risk Analyses at SAM, clarifies “we decided some time ago that we wanted to find a solid and structured investment wrapper for forestry and plantations which meets all the criteria of stringent institutional and high net worth sophisticated investors. We are working on teak projects, biomass, palm oil and various other proven forest sector and timber related assets; but whilst they are good none of them had the credentials of directly protecting an endangered species as with the agarwood story, and as part of the process creating a new sustainable industry which benefits the investors at the top of the chain all the way down to the local communities on the ground; a net new economy in fact. Whilst most investors will confirm it’s the bottom line that really matters, i.e. how much return you can get for your buck, being able to invest in a product that not only provides all the required financial benefits and security but becomes a real force for good is hard to find.” What SAM have done is listen to their institutional clients and create a product that mixes limited numbers of mature CITES approved agarwood trees, in themselves relatively hard to find and valuable from the outset, with new plantings thereby creating a 7 to 8 year investment horizon which has capital growth and income throughout. A unique financial product in a sector where returns are usually either annual and low, or long term and potentially high. This is a balanced structure of income and future returns creating a risk weighted portfolio product with an income of around 8% and variable final IRR of 12 to 24%. The product is available to funds and sophisticated HNWI investors only in minimum tranches of US$500,000 and presently SAM have access to around US$50million in inventory only which will be managed by APC with leverage from their proven from soil to oil programme. About Sustainable Asset Management: Sustainable Asset Management is a private Singapore based company funded by Africasia Private Equity. Africasia focus on providing seed capital and funding for companies within the agricultural domain. Sustainable Asset Management now advises on and deals with all the project evaluation and due diligence of businesses Africasia considers investing in, as well as offering the same service to private investors, institutions and alternative fund managers. www.sustainable.com.sg About Asia Plantation Capital Asia Plantation Capital is an owner and operator of a diverse range of commercial plantation and farming businesses across the Asia-Pacific region and globally, part of the Asia Plantation Capital Group of associated companies. Their focus is on multicultural and diverse plantation projects geared to the domestic and commercial demands of the countries in which they operate. Working closely with and supporting fragile local communities is an underlying core principle of the APC business, providing social and cultural support as well as investment to move these communities away from traditional deforestation and illegal logging activities as a main income source. Established officially in 2008, although operating privately since 2002, the group now has plantation and agricultural projects on four continents with operational projects at various stages in Thailand, Malaysia, Laos, India, Cambodia, Sri Lanka, Mozambique, The Gambia, North America and Europe. www.asiaplantationcapital.com For further information please contact: Mark Wills – Managing Director Sustainable Asset Management Park View Square, 600 North Bridge Road, #12-04, Parkview Square , Singapore 188788 Tel: +(65) 6299 4998 // Email: mark@sustainable.com.sg // www.sustainable.com.sg Stuart Andrews – Public Relations at Sustainable Options Ltd 1 Bromley Lane, Chislehurst, Kent , BR7 6LH , United Kingdom Tel: +(44) 7921 264557 // Email: info@sustainableoptions.eu SUSTAINABLE OPTIONS LTD 1 Bromley Lane, Chislehurst, Kent , BR7 6LH , United Kingdom Tel: +44 (0)7921 264557 www.sustainableoptions.eu Disclaimer: The following news is paid for and /or published as information only for our readers.Investorideas.com is a third party publisher of news and research. Our sites do not make recommendations, but offer information portals to research news, articles, stock lists and recent research. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities . All Investment involves risk and possible loss of all investment. Disclaimer in full , Investorideas.com Disclosure Please read individual disclosures for featured stocks. Continue reading
These Farms Could Grow Your Wealth
Posted on June 10, 2013 by Juan Federico Fischer Uruguay has some of the most fertile soil in the world. The case for owning farmland as a strategy to safely grow or preserve your nest egg has never been stronger. Increasing populations and wealth in emerging economies is the primary driver. As people in these economies become richer, they eat more food. Drought (or too much rain) has caused havoc with harvests in major producers like Canada, the Ukraine and parts of Brazil in recent years. The countries producing food are restricting trade, as they fear shortages. Looking to the medium term, we can expect food prices to continue to trend up. And the best place to find productive farmland is Uruguay . With consistent appreciation and an annual cash return Uruguayan farmland is a great store of value in turbulent times. Nestling between Argentina, Brazil and the Atlantic Uruguay is peaceful, stable and has over 2.6 million acres of farmland under cultivation. Lying unused are more than 4 million acres suitable for cultivation. The land is mostly flat—perfect for the machinery needed. And water isn’t a problem. Much of the country sits on the world’s largest aquifer and rainfall is even and year-round. It’s easy to find good land. The country is among the most fertile in the world. Uruguay has non-degraded soil producing two crops a year and healthy grass-fed cattle. The country supplies 5% of global beef exports; it’s the 6th largest producer of soya beans…and the 4th biggest exporter of rice. The case gets stronger when you hear how free you are to sell your crops wherever and whenever you find a willing buyer. There are no export tariffs, or production quotas or other restrictions like there are in other parts of the world. There are also no limitations on what you—as a foreign buyer— can buy…and you are treated as a local under the law. It’s probably the easiest place for the individual farmland investor. It’s a passive, turnkey investment. You don’t need to know anything about farming. You can lease out the land for a cash rental paid up front, or you can hire a local farm management company that reports on operations directly to you. They’ll give you a business plan. Once you agree on that with them they will implement it on your behalf. The cost of land ranges from $900 to $5,000 per acre. If you buy land and lease it to a farmer you can expect a yield of around 4%. Go with a management company and you can expect a higher yield, perhaps around 6% to 8%. Here’s a recent example of what’s on offer: A farm in the western part of Uruguay near the colonial town of Colonia. This is where you’ll find some of the best land in Uruguay. It’s 120 acres and the price is $485,000—$4,041 an acre. Then there’s the appreciation potential farmland offers you. Over the last eight years, farmland has appreciated at an annual rate of above 15%. You can expect the appreciation to continue, at about 10% yearly. Continue reading
Invest In Farmland
By Anne Perks FARMLAND has out-performed both equities and commodities in terms of value growth and levels of volatility over the past 17 years, with momentum continuing into the first quarter of 2013, according to Chesterton Humberts’ latest rural research report. Since 1995, average farmland values have risen by 9.2 per cent per annum, well above equities (4.1%) and gilts (7.4%), while returns were much less volatile (12.4%) when compared to oil (51%) and gold (14.7%). This makes it one of the best performing asset classes in terms of low risk and high returns after gold. Chesterton Humberts has recently set up an index to monitor growth in agricultural estate values. According to the company’s new Agricultural Estates Index, which tracks quarterly changes in the value of a standard basket of agricultural estate types (from bare land parcels up to fully-equipped residential estates) with grades 1, 2 and 3 land only, average estate values rose by 0.4% in Q1 2013 to stand at £10,581 per acre. The biggest uplift was seen in the larger transactions, which are mainly driven by investors seeking opportunities to achieve worthwhile economies of scale. Overall, however, farmers remain the main buyer group as they seek to expand their existing acreage, followed by UK investors and private purchasers, including overseas buyers taking advantage of the current weakness of sterling. Andrew Pearce, head of Chesterton Humberts’ rural agency, explains: “Despite the weather failing to improve during the first quarter of 2013, there is certainly a compelling long-term case for investing in farmland. The main advantages, which include scarcity value, rising food demand and tax advantages, are set to continue for the foreseeable future. Additionally, the changing global weather patterns are likely to exert upwards pressure on food commodity prices, while technology will create longer-term cost savings and efficiencies.” Nick Barnes, head of research, said: “The combination of low volatility with its potential to generate long-term capital growth and income allied to potential tax benefits has demonstrated that agricultural estates outperform other assets, including equities and commodities, and have thus attracted a wide range of prospective purchasers. “Provided the regulatory and tax environment stays relatively benign, it is likely to be only a matter of time before the institutional funds become more involved in the sector again.” Chesterton Humberts is now forecasting that agricultural estate values will grow at a rate of five per cent per annum over the next five years due to a combination of the longerterm positive fundamentals of the sector and the supply/demand imbalance. This figure may well be exceeded in some local markets, where the availability of larger estates will drive growth in values. FACTFILE * Farmland is second only to gold in terms of longterm risk and return. * Average per acre agricultural estate values rose 0.4 per cent to £10,581 an acre in Q1 2013. * Investors are increasingly attracted to the sector’s low volatility and high growth track record. * Agricultural estate values are forecast to grow five per cent per annum between 2013-2017. Continue reading
