We believe that there is a better way which lets ordinary people like us invest responsibly in something that provides reliable growth, is backed by stuff we understand, and doesn’t contribute to killing the planet.
Here’s how it works.
There’s no ‘fin’ or ‘tech’ at this stage. We cultivate good old-fashioned relationships with forest owners all over the world so that we can purchase a standing forest or plant one. When selecting these forests, we take care to choose only those which conform to the highest standards of ethics – forests that we would be proud to own ourselves.
The wonderful thing about trees is that there are many types of forests to suit your investment objectives – some grow quicker and are used for paper, while some hardwoods grow more slowly but are eventually much more valuable when they are harvested.
Once we find a forest we think would make a great investment for you, we do the necessary checks, negotiate the management and maintenance contracts, and so on. In short, we do all the heavy lifting, so you won’t have to.
Each forest is purchased, owned, and managed by a Special Purpose Vehicle (SPV), and their profit and loss is completely independent and “ring-fenced” from our own operations at Ekofolio.
Tokens are then issued for each forest that we list on our platform. The number of tokens issued will always be high enough so that the price of each token is low enough to be easily tradeable.
Forest tokens are coded with essential information about that forest, which could include the types of trees being grown, geolocation data and sometimes special features such as visiting or fishing rights.
So here’s the easy part. You set up an account in a few simple steps, select a forest that you like, and invest at the click of a button. Just like on any other online investment platform.
There is of course, a small fee when you invest – we’re running a business after all. The transaction is recorded securely on the blockchain, and the tokens are safely stored in your account wallet.
Your return on investment can be broadly divided into two categories: appreciating token value, and net harvest income. Depending on the type of forest and its location as well as various other factors, they combine to provide average returns which can vary from 1% all the way to 10% or more per annum.
The fundamental value of your token increases proportionately over time, along with the Net Asset Value (NAV) of the forest. This in turn increases in tandem with the biological growth of the trees, rising timber prices, and the appreciation of the underlying land value.
The NAV of each forest will be assessed and reported regularly by independent third party forestry experts and financial auditors, whose reports will be fully available to the public. After each cycle of assessment, the fundamental value of your token should reflect the appreciation in the underlying forest.
Every forest is unique, and as such revenue from each individual forest will vary on a case-by-case basis. But in general, net harvest income may be returned or redeployed to further increase token value, after operational and management costs have been deducted. Generally speaking, income from the forest can be generated from the following:
During planting, young trees are planted close to one another. After a few years, using a process known as ‘thinning’, foresters will harvest some of these trees to make room for the rest of the trees to mature. This process may be repeated 1 or more times over the growing cycle of the forest, depending on the types of trees being grown.
Income from the sale of timber from thinning, as well as from the harvest of mature trees, is distributed to token holders after costs have been deducted.
Additional income can be generated through other sustainable and ecological use of the land besides planting trees, again depending on the type and location of the forest. For example, hiking, camping, hunting, or fishing permits could be sold.
The land could also be used for renewable energy generation for nearby rural communities, and leases could be sold for sustainable agriculture utilising the latest agroforestry techniques.
Hang on to your tokens, and watch them grow steadily. Or sell them whenever you want to take advantage of the appreciation in token value. The point is, you have a choice – unlike forest owners of yesteryear. And as our platform grows, liquidity can only increase since there will be many people like you trading forest tokens on our platform.
Our core mission is to hold on to the forests we acquire indefinitely, managing the forests sustainably and profitably on behalf of all token holders, thus increasing the amount of forested land worldwide.
As such, there are no ‘exits’ in the traditional sense – you simply sell your tokens at a time that is right for you. However, there may be an occasional need to sell the land itself, at which point token holders will be consulted on the appropriate action to take.
We’re a young startup, and we’re investigating multiple ways in which we can provide additional benefits to investors besides pure financial returns. Thanks to blockchain technology, we’ll be able to encode specific forest tokens with smart contracts and unique features. Watch this space for future innovations!
Experienced investors know that no investment is fool-proof. There are always risks involved. However, sustainable forestry is one of the most stable and predictable investment asset classes around, which is why many pension funds also invest in forests.That being said, it is important to us that you understand the risks involved when investing in specific assets.
Every forest will carry different types and levels of risk, and naturally, commensurate with those risks – some will of course provide better returns than others. We’ll always take great care to present these risks transparently and clearly, so you can make an informed choice based on your judgement and overall appetite for risk.
The value of your investment may decline. Natural disasters may strike, damaging or destroying trees. The prices of specific types of timber being cultivated might go down. In extreme cases, war might even break out.
To mitigate these risks, we’ll always aim to have insurance in place whenever it makes sense. We might also negotiate contracts on the sale of timber with buyers to hedge against timber price deflation. And of course, we’ll steer clear of potential conflict zones.
We can generally predict and forecast when we’ll perform forest thinnings and generate revenue from the sale of timber. However the income received will still be dependent on prevailing prices as well as the yield and quality from the trees themselves. We can therefore estimate a range of returns from dividends, but not promise it.
The cost of management of the forest may also increase unexpectedly at times due to various factors, and this will have an impact on net harvest income.
On very rare occasions, a specific forest SPV may fall into financial distress due to a variety of unforeseen circumstances, and require a fresh capital injection in order to continue operations.
In such extraordinary circumstances, new tokens may have to be issued as a basis for raising additional working capital. Existing token holders may choose to purchase these additional tokens to avoid pro-rata dilution.
The liquidity of your investment is a function of a critical mass of the number of buyers and sellers for any given token, at any point in time. This liquidity will be enhanced over time as more investors hear about our work and actively trade on our platform.
We are also looking into further enhancements to provide liquidity including peer-to-peer payment options, institutional liquidity providers, and algorithmic trading engines and more.
We currently have three types of forest investment opportunities in the pipeline. Each of them has unique features and projected rates of return.
Register your interest below and we’ll get in touch when they’re ready for investment.
€ 26,688 of € 26,688 100% of property price raised