How can I get my money out?

The asset will be valued annually on the 31st of March each year.  Up to 1 month after this investors can look to sell their shares, current shareholders will have first right of refusal, after which shares can be sold to another NZ investor. 

Will I actually own a percentage of a forest or does it all just go into a general fund?

Each investment is set up as a limited liability company.  You will own shares in the company in proportion to the value of your investment.  As such, you will own a proportion of the trees, land and carbon based on your shareholding.  A board will be formed and made up of shareholders and all major decisions will require shareholder approval.

How much ownership of the land will I have within a shared Syndicate?

Your share of the company will be equal to the amount you invest divided by the fund size. 

ABOUT THE INVESTMENT

How can you prove a 12+% return?

When we purchase a new block we set the purchase price based on achieving a return in excess of 12%.  In fact, we aim for a far higher return to cover risks.  We take a conservative view in our assumptions, including on log price, carbon price and operational costs.  Growth rates are based on actual growth rates in nearby forests, and we expect to better these due to improvement in genetics.  We attempt to mitigate as much risk as possible; but it is impossible to mitigate all risk.

How can you offer a return after four years while others keep you waiting over 25 years?

We are investing in timber plus carbon growth. We can measure growth of carbon annually from age 3.  As such, we can make an emissions return after the first measurement, receive NZU’s and then decide to sell this on the open market.  We will look to do this every year.

I am not a New Zealand Investor, can I invest?

The fund is set up for New Zealand investors only.  This is to ensure there is no inadvertent breaking of the Overseas Investment Act (OIO).

What will happen to our investment or impending investment once the OIO overseas regulations changes come into effect?

The OIO regulations coming into effect this year will make it harder for overseas investors to purchase NZ rural land.  This will have the effect of lowering demand for the land and as a result may lower the purchase price required to acquire the land. 

Is it possible to start receiving revenue after the first year of investment, or do I need to wait the full three to five years?

Dividends will start after the first carbon measurement is undertaken on the growing trees.  Traditionally this is at year 3.

How do we gain access to the Model behind the financials?

The model is Forest Leaders intellectual property (IP).  As such, it is not available for investors to view.  A copy of the cashflows can be made available on request.

What differentiates Forest Leaders from the mainstream forest investment funds?

We are proudly New Zealand owned, with all profits and taxes paid in New Zealand.  Our goal is to bring forestry as an investment class back from overseas ownership and make it a backbone of every New Zealanders portfolio.  We are prepared to invest alongside a syndicate if requested, so we have skin in the game.  Finally and importantly we support rural mental health financially and by giving time. 

If we miss out on a bid, do we lose the opportunity?

Forest Leaders success rate on bids is generally very good.  However, if we are in a competitive process and are out priced, then we will quickly move to another property to fill the gap. We have given ourselves 12 months to purchase the required amount of land. 

How will dividends be paid and how often?

Dividends will be paid annually, after the forest has been measured for carbon growth and a Carbon return submitted and the units received into the companies account.  Forest Leaders will make a recommendation to the board about when would be a good time to sell all or some of the units. And once sold, a proportion of the revenue from the sale will be distributed, ensuring enough is left to cover future operational costs. 

Is there a maximum investment amount?

No, there is a minimum investment required of $150,000, however, you can invest any amount you wish above this amount. 

How have returns been projected?

Returns are projected on growth rate of the newly planted trees.  This is derived from Forest Leaders experience and knowledge of other forests in the area.  From this growth flows the carbon income.  One tonne of wood equals one tonne of carbon.  So for every tonne of wood grown we can sell a tonne of carbon at the market price.  Likewise harvest logs are sold by the tonne, (by grade) so the higher the growth, the better the return.

Who can Invest?

The Financial Markets Conduct Act 2013 (FMLA) governs offers of financial products made in New Zealand. Investments in syndicates promoted by Forest Leaders will only be open to investors who fall within the exclusions applicable to offers made to “wholesale investors” as set out in Schedule 1 of the FMA.

What entity can make an investment?

Any entity (Individual, Trust, Company) can make an investment as long as they are Wholesale Investors.  A client could also make an investment in the name of their children if they wished.

Am I protected by limited liability?

We place each investment into a limited liability company (of which you become a shareholder).  As such, your liability is only for what you have invested.

When will the forest be harvested?

Generally we will aim to harvest the forest between 25 and 28 years.  Forest Leaders will make a recommendation to the Board taking into account the market, slowing growth rates, ability to replant etc.

What Happens after harvest?

Before harvest the shareholders will make a decision whether to harvest or sell the investment as standing trees.  If the shareholders continue to harvest, the area harvested will then be replanted the following winter.

At this point the Shareholders can choose to see the investment or continue with another rotation.  If the decision is to sell the investment, the land and replanted trees are then independently valued and listed for sale, with the result and net proceeds paid to investors.

Explain what you mean by being an ethical forester?

We believe foresters must be registered under the NZ Institute for Forestry scheme, ensuring they abide by a code of ethics which includes sustainability, treating others with respect, a high standard of service, disclosure of conflicts and taking responsibility.

As an owner, are there regular meetings regarding the progress of my investment?

Forest Leaders prides itself on keeping investors fully informed, in fact we want to teach you all about your investment.  We will provide you with regular newsletters, update you on key items as they occur (e.g Government Carbon Auctions), provide the Board with quarterly operational report and we will run an annual field trip to your forest.  If you are not feeling fully informed, we have failed.

Does Forest Leaders give financial Advice?

Forest Leaders is a forest asset management company.  The advice it can give only relates to forestry advice, including growth rates, species, forest management, harvesting, forest product markets.  Forest Leaders is not a financial advisor and as such we recommend you consult with an authorised financial advisor.