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Barrister Life Style Blog

German forestry investments

If you are looking to diversify your portfolio, have a hedge against inflation and 100% ownership of the asset, then you might want to have a look at Robinia forestry investments in Germany. Baum Kapital GmbH is the provider and it is located in Brandenburg, Germany. The company has been successfully managing hardwood plantations in Germany since 2008.

Baum Kapital now offers investments into a new Robinia (Black Locust) hybrid, which has the same properties as Oak, but grows ten times as fast. This enables a thinning in years 5 and 7 and a final harvest in year 10. This new Robinia hybrid has taken over 30 years to develop and it grows twice as fast as ordinary Robinia trees. This hardwood tree is perfectly suited for the German climate and is very robust against cold winters, drought and wildlife, making it a perfect plantation tree.

Benefits for the investor;

  • Robinia timber correlates highly with inflation and is therefore an effective investment for preserving capital.
  • Robinia timber has a low to negative correlation with other asset classes.
  • Diversification: an investment in Robinia forestry helps in creating a more efficient portfolio while providing a better match for long-term pension liabilities.
  • Reduced volatility: In relation to Robinia forestry’s rate of return, the volatility is low. This is due to the Robinia trees, which grow independent of what happens on the financial markets.
  • Robinia trees are truly sustainable, as they regrow from stump after harvesting, making consecutive rotations very attractive and relatively cheap.
  • All Robinia plantations are located in Germany, which offers political and economic stability.
  • Forestry insurance against the biggest natural risks included.
  • Freehold title to the land possible and advisable for complete security of the investment and the benefit that increasing land prices bring. Naturally all freehold purchases are notarised by a German notary.
  • Projected return on investment is conservatively estimated at 100-150% in 10 years.

Considerations;

  • Robinia investments are illiquid as there are no annual returns and the trees have to grow to a certain size before they can be harvested.
  • These investments are open to High Net Worth individuals only.
  • The entry level is at €6,500 for a small leasehold plot.
  • Freehold plots start at €60,000.

If you would like to know more then please drop us an email at info@baumkapital.de and we will send you our company brochure and additional information if you wish it.

 
 
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