File:Ethical Forestry and AJPVentures Acacia Brochure.pdf

Very “interesting” brochure by Ethical Forestry and AJP Ventures.

It's interesting because it's total and complete bullshit.

[edit] An example of untrustworthiness

It's a very slick professional looking brochure laced with attractive quotes. Professional layout, clear schedules and graphs, separation in columns and the proper use of bullet lists give it a professional and attractive allure.

[edit] Photos

However, the brochure is about Acacia plantations and no photo in this brochure contains Acacia or Acacia woods. On the contrary all photos seem to be stock photos straight from the internet and have nothing to do with Acacia.

• (Page 1) Two hands holding seedling. Which is not Acacia.
• (Page 5) Two hands supposedly planting a "young tree". This is no young tree let alone a young Acacia tree it's a bonsai tree and not one made from acacia. (In fact it is perfectly possible to create a bonsai using Acacia.)
• (Page 17) A large picture showing trees on a plantation. Again no Acacia but Teak instead.
• (Page 18) The close up of tree bark. Again no Acacia but this time it's a pine tree of some kind.
• (Page 13) Three photos suggesting to picture people shares their experiences with the reader are actually stock photos from the internet. The photo "grandfather and granddaughter reading under tree" we found on the internet within a few minutes. Suggesting these "Case studies" are as fake as the rest.

[edit] Text

The text is readable and well written and filled with quotes and claims of doing good for the world and earning - a lot of - money at the same time. However, in many places, the actual content shows misunderstanding of the matter and is misleading in nature.

Some commented excerpts:

• (Page 3) Timber investments are nothing new: institutions and hedge fund managers have invested in timber for many years and produced consistent long term profits for themselves, however, this kind of asset was unavailable to individuals due to the high levels of investment required.

Institutions and hedge funds tend to invest in reliable and proven concepts. If more risk is involved they have professionals to study the would be opportunities and tend to spread risk to cover possible losses. Public investment funds and pension funds which try to offer "green", "socially responsible" and "ethical" investments do exist without "high levels of investment". Investments in traditional, professional forestry companies which offer normal revenues have been and will always be available.

• (Page 19) Your investment helps to save the rain-forests by reducing greenhouse gases and protecting wildlife.

Saving rain-forests is definitely not done by reducing green house gases and saving wildlife. To save rain-forests is to save the CO2 sinks they embody and to save the wildlife living in it. The way it's formulated here is pure nonsense.

• (Page 19) By planting new rain-forests for harvesting, you are helping to relieve the strain on the existing ones by offering alternative sources timber.

It is impossible to plant rain-forests. By definition a rain-forest has been growing for several hundred years to become a rain-forest. To say you have miraculously found a way to plant rain-forest and then to cut it down again is just madness.

• (Page 19) Once your investments have matured and all the trees have been harvested, the land will be replanted with species of native trees and gifted to an ecological easement trust; forever protecting the trees from commercial felling.

This sounds almost too good to be true, so it's probably not true. Even if the financial situation of the company would allow them to do this instead of replanting or selling the land and even if these intentions are true even than it is legally very difficult to protect an area of land for the long duration it takes to become ecologically interesting, not to mention to keep it protected after that. Always demand documents which prove these kinds of claims to be contractually secured with respected entities of which you yourself can check the credibility.

[edit] Claims

• (Page 4) An £18,000 investment over 10 years projects returns of £93,642

This would be a return on investment of 17.9 % per year. In my opinion this is completely unrealistic and very unlikely to happen.

• (Page 6) An £18,000 investment over 22 years projects returns of £732,298

This would be a return on investment of 18.3 % per year. In this scenario they claim to use the income from thinning to plant more trees accounting for the increased return.

These types of claims are often found in this sector. However, they are never realized. The only realistic return on investments in forestry are those realized by traditional professional forestry enterprises or any other investment for that matter. This type of return on investment are only realized in industries such as drugs, oil and patent-ridden enterprises such as microsoft. Any timber company claiming these numbers is automatically disqualified for a lack of professional knowledge and experience in the forestry industry or a lack of good intentions. If there ever comes to exist such incredible profitable investment opportunities they would be immediately be swooped up by professional investors.

• (Page 1) HMRC and pension compliant.

The claim to be HMRC or SIPP compliant is widely used. It doesn't say anything about safety whatsoever. See SIPP for details.

• (Page 16) Our Acacia tree investments start at £18,000, for which you purchase 300 trees., The security of your investment is of paramount importance., We have endeavoured to make your investment as secure as possible by:, Giving you full cropping rights to your trees - a legal entity in Costa Rica that has more rights than actual land ownership., Utilising Costa Rica’s Forestry laws which allow you to own a crop independent of the land.

All this constitutes to an unregulated direct ownership. If anything this is the most unsafe way of investing. It lacks all extra security that a collective investment fund offers small investors. Furthermore, these constructions are commonly used to avoid regulation. Unregulated means these investment schemes and the investment brokers promoting them are not under scrutiny of any financial authority.

• (Page 12) If you don’t have an Independent Financial Adviser (IFA), we can recommend one for you who can advise you on your pension options. The IFA will contact your current pension company with your authority and establish its value. The IFA will then advise you of the best use of your pension funds. Once you are happy with the advice and recommendations, your adviser will prepare the necessary forms for you to sign and complete the transfer.

In my opinion you should never ever put your pension money into a high risk investment like this! Not even if it's not a scam! Don't but money you (might) need into anything else but the safest of safe!

[edit] See also

Risks, weaknesses and problems of (tropical) hardwood investments