Investors interested in adding alternative investments to their portfolio have a range of options when it comes to forestry investments. Each comes with its own characteristic risks, management style, and type of returns. The website Investing Alternatively does a good job of explaining the types of forestry investments available to retail investors.
The site and its descriptions provide an opportunity to describe how our investments are evolving as Planting Empowerment grows. The Forest Investment would be classified as “Tree Certificates” in the site’s definition, i.e. investors own all or a portion of the trees planted in specific timber plantation with a certain “vintage”. While the Tree certificates approach enables smaller investors to access forestry investing, the opportunities tend to be riskier because there is minimal liquidity, meaning the investor can’t exit the investment easily.
Planting Empowerment is in the process of consolidating our funds to operate more like the “Tropical Timber Company” described on the site. This means that we will merge our two original plantations and investors into a single entity. This consolidated company will have a larger capital base and multiple vintages of timber to smooth revenue streams.
We decided to take this route to give our investors more liquidity and regular revenues, and to decrease our administrative expenses from running multiple independent timber funds. Instead of gaining large dividends, investors will benefit from share appreciation and smaller dividends as we reinvest profits into planting more trees and crops.
Over the long term, we believe that operating as a private timber investment company makes sense for our investors and the growth of the company.
As always, before choosing any investment, investors should understand how to choose forestry investments and consider how they fit into their broader financial plans.