Investment in forestry



ORIGINAL POST
Posted by fitzy_b 11 yrs ago
I only looked at the website for 2 mins, but here is my impression:

The return isnt that substantial. Sure GBP 640k for a GBP90k investment looks nice, but you are locking your money away for 20 years.

The "PROJECTED" return is around 10.3% p.a. For this, you are taking land price risk, credit risk on the company (or maybe not if you keep the land and produce?), timber price risk, and offtaker risk (i.e. finding someone to buy the wood) (and probably FX risk). In their forecasted returns they are assuming a particular growth rate in the price of wood etc.

Plus, they chrage you a fortune in management fee: 14k management fee out of a total investment of 46k?

If you have a view that land prices in Germany won't go down, timber prices will increase (a lot over 20 years - they assume 120% increase over 20y), you'll be able to sell the timber, and you won't get hurt on fx, then go for it.

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COMMENTS
OffThePeak 11 yrs ago
Many scams are presented in just that fashion


Do check the promoters track record, and if he hasnt got one, be doubly cautious

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OffThePeak 11 yrs ago
Sure. An over-optimistic forecast. And "middlemen" are bound to skim profits on any price rise

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