For generations, forests have been recognised by land managers and local communities for the benefits they provide: clean water, biodiversity, wildlife habitat, microclimate stabilisation, aesthetic beauty, and, when actively managed, the sustainable generation of forest products.
Since the 1980s, timberland has also garnered institutional investor attention because of the portfolio enhancing characteristics of low correlation with other assets, inflation hedge, and exposure to the benefits of a forest’s biological growth as a value driver. Forest Investment Associates (“FIA”) believes investors can utilise active management to harness biological growth for targeted investment outcomes, including cash yield and total return, while also maximising the option value of the forest estate for other components of value.
Active Forest Management
Silviculture, the art and science of growing trees, is essential to sustainable forest investments. Unlike past extractive practices, modern forestry utilises silviculture and long-term management planning to achieve specific outcomes. Today’s working forests benefit from hundreds of years of forest management knowledge and a century of industrial research and development for key commercial species, including loblolly pine, Douglas-fir, radiata pine, and various eucalyptus species.
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