Sustainable long term total returns
The Central American Timber Fund operates in a broad network of organizations. Its portfolio of assets is being invested for the exclusive benefit of CATF. CATF has been set up for a limited period and will end on december 15, 2030, unless the final felling will not have taken place yet, or CATF has been dissolved.
Our main objective
The main objective of CATF is to provide its unitholders with attractive and sustainable long term total returns, in the form of long-term capital appreciation, through investing in a portfolio of diversified wood assets, while safeguarding nature and environment and creating benefits to the local population at the same time.
CATF aims at maintaining and building a diversified portfolio of wood plantations located in Latin America, with a focus on Costa Rica and works therefore in close cooperation with local and international service providers. CATF can initiate new plantations as well as maintain already existing plantations.
The largest component of timberland return is from the trees themselves and is driven by biological growth and timber prices. Biological tree growth generates a largely consistent, absolute return on timberland property. Tree growth accounts for an increase in timber volume year-on-year and higher timber unit values from increased tree size. The growth rates vary often substantially with species and climate.
Direct and indirect investments
CATF will also indirectly hold most of the real estate property on which the plantations are made as well as the trees themselves. Hereto direct and indirect investments will be made.
Targeted Internal Rate of Return (“IRR”)
CATF aims to achieve an IRR (after fees, taxes and expenses) over the term of CATF of 7 (seven) per cent per annum. However, the management company does not guarantee that the target net IRR will actually be achieved. Through age diversification and active management of wood assets, the management company will aim to balance the CATF’s objectives of becoming cash flow positive with its goal of creating capital growth. The overall objective of the CATF is to maximise unitholder value. CATF will generally seek investments in wood assets giving it a controlling interest of 100%.
There can be no assurance that the investment objective and policy of CATF will be achieved. Consequently, the net asset value may increase or decrease and positive or negative returns of different levels may arise.