Forestry investment firm Greenwood Management has announced it is hoping to make its first payout to investors who have been with the company since 'Phase 1' of their Acacia project, in Spring 2013. The payout will take place after Greenwood has undertaken a thinning exercise, which removes some of the trees in a plantation to allow others to flourish and grow as strong and large as possible, thus maximizing the quality of the final harvest.
The trees that are removed through the thinning process are sold for use in the production of charcoal or for use in fence construction, for example. FRA's analysis partner, Peter Collins, stated, "This type of forestry investment model ensures that anyone investing in timberland doesn't have to wait until final harvest to see returns on their investment - they see returns throughout the process, which is a very attractive prospect for those looking for a more medium-term asset class."
Greenwood Management's Acacia plantation is one of its most established and the initial Phase 1 investments were made back in 2008. Greenwood claims that the project is "well on target" with its, "operating model and is progressing extremely well in Bahia state, Brazil."
The final harvest of the trees in which people have invested should be sold for a much higher value, as they will be larger and of the best quality, explained Greenwood Management. However, it added that it will try to optimize the returns from the thinning process for investors, which means ensuring that the timber is sold when market conditions are at their best.
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Forestry Research Associates is a research and advisory consultancy that focuses on forestry management, sustainability issues and forestry investment around the globe.
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