Einde inhoudsopgave
Corporate Social Responsibility (IVOR nr. 77) 2010/13.3.1.3
13.3.1.3 Timber Opportunities Fund
Mr. T.E. Lambooy, datum 17-11-2010
- Datum
17-11-2010
- Auteur
Mr. T.E. Lambooy
- JCDI
JCDI:ADS364573:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
Futuro Forestal S.A. is a 'Reforestation and Service Company'. It claims to be one of the leaders among key timber investment management organisations; http://www.futuroforestal.com/en/page_type0.php and http://www.cssf.lu/, all websites accessed on 15 September 2009.
Caudex Capital GmbH is an independent investment boutique that focuses on structuring sustainable commodity investment products especially for institutional investors, at: http:// www.caudex-capital.com/, accessed on 3 April 2010.
Idem.
Caudex Capital, see: http://www.caudex-capital.com/index.php?id=33&tx_ghdisclaimer_pi1 [redirect]=29, accessed on 3 February 2010. According to information obtained by email from Futuro Forestal of 11 May 2010, all operations including concessions will be FSC certified.
Timber Opportunities Fund, Geneva Forum for Sustainable Investment, 26 March 2009, at: http://www.gfsi.ch/admin/wp-content/uploads/caudex-capital_ateliers.pdf, accessed on 2 September 2009.
Another sustainable forestry investment fund is the Timber Opportunities Fund SCA (TOF). This is a closed-end 'Specialised Investment Fund' (SIF) regulated by Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. TOF invests in projects in Latin America, predominantly in Panama, Costa Rica and Argentina. A German management company, Caudex Capital Timber Investments GmbH (Caudex Timber), advises TOF on new timber investments and manages the portfolio (see Figure 13.2). Caudex Timber is a joint venture between (i) Futuro Forestal S.A.,1 a Latin-American forestry management company, and (ii) the German investment company Caudex Capital GmbH.2The structure is presented in Figure 13.2.
Figure 13.2 Structure of the Timber Opportunities Fund (source: Caudex Capital GmbH)3
TOF invests in a diversified portfolio of sustainable timber projects, including timber concessions, natural forest, avoided deforestation projects and reforesta-tion.4 TOF describes its activities as follows:
timber concessions: the concessions grant the right to harvest in a certain area of forest for a number of years (usually 20 years). Timber concessions require less capital than the purchase of forest. Upon the construction of sound infrastructure, immediate harvests along with early cash flow are possible. A mix of low initial investment and fast cash flow result in attractive returns. Moreover, it is emphasised that TOF is convinced about the necessity of forest certification, according to sustainability standards;
natural grown forest: provides fast financial returns. However, more capital is required than in timber concessions. At the same time, the certified ownership of land offers more security and no time limits;
investment in avoided deforestation projects: whilst no or low income from timber harvests will be achieved, noticeable revenue can, in time, be generated from the emerging market for forest-based carbon certificates. The advisors will be seeking to develop appropriate schemes that are 'REDD ready';and
reforestation projects: these are long-term investments with negative cash flow in the first years. However, the sustainable forest management during thegrowthphasewouldsecureahigherreturninthelongerrunin comparison to natural forests or timber concessions. The other advantages of reforestation projects are secured land ownership and potential capital appreciation of the forest and the land.
The company's communications claim that due to the unique nature ofthe fund, the success rate will be determined by the following factors:5 (i) TOF has a clear focus (Latin America); (ii) its pipeline contains a substantial number of projects covering a volume of approximately USD 500 million; (iii) TOF follows high standards regarding ESG, i.e. biodiversity and sustainable forestry are incorporated as part of the risk management strategy; and (iv) the project entails the combination of local ground forestry management experience and expertise in capital markets, private equity and portfolio management.