FIM timber Ucis aims to tempt HNW investors

According to Edward Daniels, investing in commercial forestry can diversify client portfolios and provide a hedge against inflation.

He said because timber had a variety of uses such as house building, paper pulp, chipboard and wood chip for biomass boilers, it offered good prospects for investment.

The Sustainable Timber and Energy LP also offers tax-efficient returns, 100 per cent inheritance tax relief, no capital gains tax and is uncorrelated to traditional stock markets.

The fund, which was launched in May 2010 and has £43m of investment, focuses on sustainable UK commercial forests, with a small percentage of the fund invested in renewable energy projects.

Mr Daniels said: “We consider ourselves low risk, but we are also a long-term investment. Our original investors have made a 20 per cent return since the fund was launched in May 2010 and that has been driven by rising timber prices.”

Mr Daniels added the fund should make up 5 to 10 per cent of an investor portfolio and was only suitable for high net-worth investors.

He said: “We have a compliance procedure we go through and clients who do not fit the criteria would not be able to invest.

“We have got a lot of IFA contacts but we always want more because they do provide a significant amount of fund-raising for us.”

John Dalton, consultant for London-based PQR Financial Planning, said: “FIM has a good track record of reasonable charges and competence.

“The fund is an unregulated collective investment scheme so one has to be careful about suitability, but historically forestry has not been a volatile investment and has produced reasonable returns in almost all market conditions.

“Within the Ucis context it is not high risk and is a good diversification for client portfolios because it is genuinely uncorrelated with all the mainstream investments they hold.”