Emerging Markets Forestry Investments

The Global Emerging Market Forestry Fund, LP (GEMFF) is a joint venture between IFIA and an international private equity group, Global Environment Fund (www.globalenvironmentfund.com).  GEMFF’s investment strategy is designed to provide higher risk-adjusted returns than are available in developed-country timberland investments.  These returns will be achieved by:

• Investing where others are not, so capital is scarce.  As a result, the innate returns to capital should be higher than in the developed world which is awash in liquidity.
  
• Investing in productive land and established plantations, especially those established by national governments or aid agencies.  Improved forest management frequently can produce outstanding incremental returns.  Many of these plantations were developed without due attention to markets for the logs.  GEMFF will rectify that by investing in processing facilities and marketing activities to connect these forests to world markets.
  
• Investing in solid-wood products manufacturing facilities to add value to the timberland, and open the opportunity for high-return capital investments in under-capitalized manufacturing facilities.
  
• Investing in technological innovation and in human resources development.  Considerable research has shown that such investments have high incremental returns.
  
• Certifying all properties to the Forest Stewardship Council (FSC) standard.  Forest certification both reduces risk and may enhance returns through better market access and higher exit valuations.

Further details are contained in our white paper A Global Emerging Markets Forestry Investment Strategy.