Product details

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Published by: International Institute for Management Development (IMD)
Originally published in: 2008
Version: 27.10.2008

Abstract

This is part of a case series. The 2004 information on investment opportunities in teak and other exotic timberlands at Prime Forestry and Precious Woods struck a chord with Ms Richardson. Somehow, these investments seemed to combine very exciting financial returns with social responsibility. Even though the impact of her investments would probably be modest in the overall scheme of things in the world, she believed it was her duty to put some of her money to work for a worthy cause. She felt slightly more comfortable with the low-key approach of Precious Woods, and she liked the liquidity offered by the stock market listing. In the end, she decided to put all her eggs in that single basket. While quite similar, the two vehicles offered very different approaches to investing in tropical forestlands. One offered indirect ownership and diversification through a Swiss listed vehicle (Precious Woods); the other (Prime Forestry) offered direct ownership of a specific teak plantation, in a format reminiscent of the smallholder ownership programmes often found in developing countries, hence with little diversification. They also differed in terms of their organisational structures, their exposure to different wood markets, the experience and track records of their managerial teams, etc. How did these investments fare?
Size:
250 employees
Other setting(s):
2003-2008

About

Abstract

This is part of a case series. The 2004 information on investment opportunities in teak and other exotic timberlands at Prime Forestry and Precious Woods struck a chord with Ms Richardson. Somehow, these investments seemed to combine very exciting financial returns with social responsibility. Even though the impact of her investments would probably be modest in the overall scheme of things in the world, she believed it was her duty to put some of her money to work for a worthy cause. She felt slightly more comfortable with the low-key approach of Precious Woods, and she liked the liquidity offered by the stock market listing. In the end, she decided to put all her eggs in that single basket. While quite similar, the two vehicles offered very different approaches to investing in tropical forestlands. One offered indirect ownership and diversification through a Swiss listed vehicle (Precious Woods); the other (Prime Forestry) offered direct ownership of a specific teak plantation, in a format reminiscent of the smallholder ownership programmes often found in developing countries, hence with little diversification. They also differed in terms of their organisational structures, their exposure to different wood markets, the experience and track records of their managerial teams, etc. How did these investments fare?

Settings

Size:
250 employees
Other setting(s):
2003-2008

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