Terms and queries about investing in forestry
The Governing Documents are the deeds, agreements or instruments that constitute or govern Forest Enterprises' Managed Investment Schemes for the purposes of the Financial Markets Conduct Act 2013. These are available to read and download from the Scheme Register at www.companiesoffice.govt.nz/disclose by searching under ‘Search Schemes’.
Investing in forestry directly by purchasing shares in a listed forestry company which owns a number of forests. See also Direct Forestry Investment.
The amount investors initially pay to buy shares in an investment. (There are also regular, on-going, instalment payments called Calls). Generally, a fixed initial cost applies for new issue investments, while an indicative initial offer applies to established Forest Enterprises investments available by open tender.
A price range (e.g. $16,500 to $18,000), which is provided as an indication of the 'current value' of a Forest Enterprises established forest investment shares for sale by open tender. The actual initial cost will be the agreed purchase price.
A metric used in capital budgeting to estimate the profitability of potential investments. IRR on a forest investment is the rate of return that makes the net present value of all cashflows (both positive and negative) from a particular investment equal to zero. It can also be defined as the discount rate at which the [...]
The name of the document produced by Forest Enterprises containing comprehensive information on previously issued established forest investments currently for sale by open tender.
See Product Disclosure Statement.
The name given to an investment parcel in a Forest Enterprises’ forestry investment. Typically each investment unit comprises 200 shares in a Limited Partnership. Investors can purchase more or less shares in the same or different forests.
The investment structure for most Forest Enterprises’ investments is a Limited Partnership (LP), comprising multiple Limited Partners who are the investors, along with one General Partner (GP). Read this helpful guide on Limited Partnerships from law firm DLA Piper New Zealand.
Net Present Value is the sum of all discounted future cash flows for a forest investment. NPV is a useful tool to determine whether an investment will result in a net profit or a loss.