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  • Growing recognition of forests leads to investment growth

    2017 - 06.26
    Growing recognition of forests leads to investment growth

    Growing recognition of forests leads to investment growth

    In recent years, investing in the natural world has grown beyond all expectations.

    Data recently published by Forest Trends shows that the amount of private capital invested into the natural world soared by 62 per cent between 2013 and 2015.

    Michael Jenkins, president and CEO of Forest Trends said: “The findings of this report speak to the growing recognition of our forests, our wetlands, our reefs, and other natural landscapes as smart investments – a notion that would have been unthinkable to most mainstream investors just five years ago.”

    “Just in the last two years covered by this report, we’ve seen a huge leap in demand for these kinds of tangible ‘real assets’ from investors. The demand is growing across the globe and from across investment instruments.”

    Forestry investments are seeing a particular surge thanks to a new understanding that investing in forests is an investment into our environment and helps to promote habitats and nature.

    More mortgage products are becoming available to assist people in buying non-commercial woodlands, and others are helping to promote investment into forest plantations intended to generate a commodity – namely logs or pulp, chipwood and fuel.

    According to the Forestry Investment Consultancy (FIC), forestry land is a relatively small investment but can yield returns of up to 7 per cent per annum. They also highlight the tax benefits of such a venture in certain locations.

    For those looking to invest in a less hands-on forestry initiative, there are a number of funds available that allow investors to access the benefits of owning forest without any of the land management responsibilities.

    Fund manager Timo Hakulinen says: “Forests are sound investment targets and offer a less risky alternative compared to, for example, equity investments. Trees keep growing even in times of economic downturn.”

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