An investment thats always growing SIFF is an asset-backed, income - PowerPoint PPT Presentation

An investment that’s always growing

SIFF is an asset-backed, income generating investment offering capital growth of a highly valued global commodity

SIFF INVESTMENT PROCESS

DRIVERS OF FORESTRY RETURNS Forestry Grants (35%) Biological Growth (65%)

RETURN ON INVESTMENT P er hectare costing €10,000 @ 8% compound for 15 years = €31,722 less €10,000 = €21,722: 1. Annual Forestry Premiums: €7,650 from €510 per hectare paid over 15 years 2. Capital Growth: €14,072 profit from sale of semi -mature forestry on maturity

FORESTRY VALUATION To predict the future value of an investment is extremely important when appraising any investment opportunity. The following factors were given careful consideration when valuing the forestry plantation: Age Productivity Area Plantation is 15 years old Productivity area is 80% 35 hectares Area and Species Tree Top Height Sitka Spruce top height is 12m 90% Sitka Spruce / 10% diverse Yield class is 24 . Crop will produce an Plantation is served by public road average of 24m 3 of timber per hectare Growth Rate Roads A forest road has being constructed into the site per year The stocking density is 80% Based on the current Coillte Timber Prices in the Stocking Density Timber Prices Regarded as fully stocked Coford/Growfor Timber yield models Data source: Coford.ie

VALUATION METHODOLOGY

WHY FORESTRY?

UNIQUE CHARACTERISTICS OF FORESTRY Biological growth is unique - always positive and irreversible Independent of economic factors that affect financial markets Preserves value during financial market turmoil

FORESTRY RETURNS: 1. Positively correlated to stock market increase 2. Increased during global financial market crisis 3. Effective hedge against inflation risk

INCREASED RETURN AND REDUCED RISK How do these unique characteristics fit into an overall investment portfolio?

FORESTRY VS TRADITIONAL ASSETS

DEFORESTATION • Agriculture and livestock feeding leading causes . • Large areas of South America, Africa & Asia gone . • Replaced with: Agriculture, cash crops, bio fuels, palm oil . CRITICAL SUPPL Y SHORTAGE • EU supply reduced by 20% due to ban on illegal timber . • ONLY 3 EU countries have supply to meet demand . • Ireland timber shortage 1.5 million tons by 2020. • EU timber shortage 316 million tons by 2030. • India and China facing critical shortages .

• Increasing by 700,000 per week . • 1 billion increase from 1999 to 2012. • 10+ billion total by 2050. • 70% increase to $15 trillion by 2025. • 50% world timber consumed by EU, US & Japan alone. • China building 50 cities the size of London next 20 years. • Huge movement in world population from rural to urban. • Drive for low-cost renewable energy. • Adding new demand pressures . • Pressure to reduce emissions increases use of biofuels . • Driven by Kyoto Protocol and EU directives .

WHY IRELAND?

WORLD-BEATING GROWING CONDITIONS

HUGE INCREASE IN GOVERNMENT GRANT €510 x3 €181 Per Per Hectare Hectare

FORESTRY GRANTS Forestry grants cover cost of establishment and ongoing management Irish Government has long-term commitment to providing forestry grants

TAX EFFICIENCY No income tax • “ The profits accruing to an individual or company from the No capital gains tax • occupation of woodlands managed • No corporation tax on a commercial basis are exempt • No cap on earnings from from income tax and corporation tax ” forestry grants Distributions from Fund are • (secti tion n 232 Taxes es Consolid solidation ation tax exempt Act 1997(“TCA”))

IRELAND IS A LOW-RISK LOCATION Low-risk location Low incidence of extreme weather conditions Healthiest forests in EU

FORESTRY REGULATION Forest stry ry regula ulatio ion n increas eases s productivit ductivity

TRANSPARENT PROPERTY LAW Legal advisor to SIFF: Ireland’s property 1. Extensive expertise in laws offer Property Law & Conveyancing transparent 2. President of Law Society of ownership rights – Ireland 2014-15 clean title 3. Distinguished career

THRIVING FORESTRY INDUSTRY • Timber industry running at 50% Thriving iving timber processi sing ng capacity due to shortage of supply industry creates s demand nd • Cutting-edge technology reduces Close to p populated EU cost of extraction economies s – huge ge market demand nd • Average export over 80% • Coillte export over 90% • Easy route to market • France, Benelux & UK

WHY SIFF?

Specialist Management Team Ensures investors access to leading industry professionals at every step of the investment process

PROVEN MANAGEMENT TEAM Asset Auditor Legal Forestry Independent Manager Advisor Contractor Forestry and Consultant Custodian

SIFF ASSET MANAGEMENT INVESTMENT STRATEGY

RISK FACTORS I PRODUCTIVITY Animal Site Third Fire Wind Frost Disease damage selection party ALL MITIGATED BY SIFF

RISK FACTORS I NON-PRODUCTIVITY Future supply Forestry Tax Inflation Currency and demand grants risk risk risk for timber

STRUCTURE OF SIFF

TERMS OF SIFF • Investment structure is a Limited • Final distribution from the sale of semi- Partnership (LP) established under mature forestry assets. Irish law . • No investment lock in – share in • LP is a low-cost structure, tax efficient partnership transferable at any time. and in a regulated environment. • No leveraging of monies in Fund. • Investors subscribe capital for shares • 1 % annual management charge. in the partnership. • 20% performance-based bonus only • Investors have limited liability up to on gross return in excess of 8% the amount invested. • 10% set up cost with 90% allocation. • 100% ownership by investors of land and forestry assets. • Detailed terms and conditions set out in Limited Partnership Agreement • Annual distribution paid from forestry available on request from SIFF Asset grants less Fund expenses. Management.

An investment that’s always growing