Macquarie sows fund seeds

MacquarieBankhas boosted its alternative investments offering to retail investors with the launch of the Macquarie Forestry Investment (MFI) Fund.

The new fund is a combination of two investment projects — the Macquarie Eucalypt Project and the Macquarie Timber Land Trust — and offers stakes in tree plantations and land over a period of 11.5 years.

The two investments can be taken separately or combined.

MFI is Macquarie’s latest alternative investment offering and follows the launch of its second film and television fund earlier this month.

Macquarie director Anthony Abraham says: “As a new participant in this sector, we are able to take a fresh approach which may enable investors to benefit from a return generated by an investment in trees and from the capital gain from the land.”

The Macquarie Eucalypt Project gives investors the opportunity to invest in forestry business in the Geelong region of Victoria, while the unlisted Macquarie Timber Land Trust allows them to own the land on which forestry plantations are located.

Abraham says the structure of the fund allows investors to choose their investment stream or diversify across both categories to reduce volatility.

MFI will also manage risk through an agreement established by integrated forestry group Midway, which secures a market for investors’ timber.

Risk management will also include independent reviews to ensure the quality of both the land and forestry operations.

Macquarie teamed up with a selection of forestry companies to set up the fund, including Midway, which has 10,000 hectares of its own plantations and manages plantations for third parties.

Macquarie also partnered with global forestry adviser Jaakko Poyry Consulting, which will review all land to be acquired and give investors an annual review of forestry management.

Environmental consultant Greening Australia will undertake conservation management for MFI, using Macquarie Bank funds.

For Macquarie Eucalypt, investors pay $6,200 for a stake, which includes interest in one hectare of plantation forestry, a lease over one hectare of land, an off-take agreement with Midway, and any carbon or other environmental credits generated by the trees.

For Macquarie Timber Land Trust, investors pay $1,300 for a unit, which equals one hectare of plantation land.