Money grows on trees for forestry fund investors
AN Irish forestry fund that has matured after 10 years has delivered a gross return of 83pc, or 6.2pc a year, prompting promoters IFS Asset Managers to claim it has been one of the best investments in the country.
The average investment in the Forestry Investment Fund (FIS) in 2000 was €9,400, which will generate a payout of just over €17,000. The returns are tax free.
Paul Brosnan of IFS Asset Managers said rising demand for more environmentally friendly sources of fuel had helped drive forestry prices higher over the period.
IFS Asset Managers has more than 21,000 acres of forestry under management. It manages €110m of forestry assets on behalf of about 18,500 investors.
In recent years, IFS has diversified internationally, with new investments in Central America.
The latest forest fund to mature, FIS, was launched in 2000 and is the first in a series of forestry funds managed by IFS to mature.
The minimum investment was €6,348 and the size of the fund was €639,948. The average investment was €9,411 and the average payout will be €17,197, or a gain of 82.77pc tax free over the 10-year period.
The Irish stock market index fell by 65pc between 2007 and 2010.
Managing director of IFS Asset Managers Trevor McHugh said: "Forestry has proven to be a good long-term, steady, secure investment."
He said forestry was the type of investment that could make a decent return even in a depression.
"If you're a pure forestry owner in tough times, you just leave the trees to grow. You don't have to decide, when prices are low, to stop feeding your processing plant."
He added that demand for timber continued to grow.
IFS has 27 other funds and said it was well-placed to match the 83pc investment return figure for the first fund.