Our Atypical Financial Assets
‘Atypical Financial Assets’, also known as ‘Alternative Investments in Movable Property and Farming’ in Belgium and ‘Tangible Assets’ in Switzerland, refer to investments providing the possibility of a financial return (sic l’Autorité des Marchés Financiers). These products enable investors to diversify their portfolios.
Treesition differs from traditional tangible assets (watches, wine, art, etc.) by offering investments linked to the growing and valorisation of Paulownia wood.
Paulownia Tree Growth
Paulownia trees are the core of our concept. This tree is characterised by its exceptionally rapid growth, reaching maturity in just ten years. This rapid development, combined with its unique qualities, makes it a valuable resource for supplying the market with high-quality wood. Paulownia is suitable for current and future climates, contributes to local biodiversity and can be valorised in a relatively short time after planting.
Our team of agronomic engineers has collected and processed data from the scientific literature and samples taken on Paulownia to obtain the following growth predictions:
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This graph models 3 different growth scenarios:
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worst: where an accumulation of events (drought, extreme rainfall, poor soil fertility, etc.) slows the tree’s growth cycle;
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average: Corresponding to the classic case of average sunshine and rainfall in Europe;
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best-case: Case where all the factors (sunshine, hydrometry, fertility, etc.) are optimal.
The aim of choosing these three scenarios is to predict our investors' potential gains as accurately as possible, considering the risks inherent in growing a tree.
Paulownia Wood Producer Value Estimation
Estimating the producer value of Paulownia wood is a crucial issue for investors in Treesition. To do this, we employ a methodology based on several key factors:
Quality feature:
Wood’s value depends largely on its quality characteristics. These include wood density, strength, durability, colour and other properties. When we assess the value of Paulownia wood, we compare these characteristics with those of other types of wood commonly used on the market, such as oak, beech, poplar, firewood and construction wood.
The market needs:
Another crucial factor is market demands. Wood prices are influenced by the needs of the companies that use this material. As Paulownia wood is used in applications comparable to those of different types of trees, we compare the costs of the latter to quantify the level of demand and, consequently, the value of Paulownia wood.
Economic context:
Wood prices can also be affected by economic factors such as supply and demand, production costs, taxes, regulations and the geopolitical situation. To calculate the relative value of Paulownia wood, we examined prices under comparable conditions to those of similar species.
In short, Paulownia timber prices can be based on the prices of Oak, Pine, Construction timber and Firewood, as this allows us to consider the quality characteristics of the wood, market demand and the economic context to obtain a rough idea of the relative value of Paulownia wood.
We have therefore created a ‘Paulownia’ indicator, the average price of which are summarised in the graph below:
Based on the average value of this indicator over the last five years, the estimated resale price of processed wood from Paulownia is €844/m³ in the second quarter of 2023. This valuation plays a key role in investor decision-making and in the management of Treesition’s assets.
Paulownia Valuation and Potential Gains
To illustrate the potential gains for our investors, we look at three different scenarios: worst-case, average-case & best-case. These scenarios are based on various factors, including tree growth, timber value and market demand. They allow investors to better understand the possible variations in returns.
Paulownia valuation
Tree valuation is based on a solid and transparent methodology. We want to provide our investors with a clear understanding of how we assess the value of Paulownia wood. Here is an overview of our methodology:
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Determination of wood production volume: We estimate the volume of wood each tree produces based on 3 growth hypotheses.
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Volume adjustment after processing losses: In order to take into account processing losses, and to guarantee the accuracy of our valuation, we apply a 50% reduction to the estimated volumes. The processing waste and tree crown are reprocessed into firewood.
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Wood quality: Wood quality is rated according to the presence of knots and roughness on the main faces of edged boards. We apply an adjusted factor of 0.75 to 1.25 depending on the characteristics of the boards, ensuring an accurate assessment of their price.
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Approximation of the price of Paulownia wood: We compare its wood with other species on the market, considering its quality characteristics, demand and the economic context.
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Calculating the total value: By multiplying the volumes of wood processed by the price per m³ of Paulownia wood, we obtain an estimate of the total price of each tree.
This methodology ensures an accurate and transparent assessment of the value of our Paulownias, providing a solid basis for our investments. At Treesition, we believe in the sustainability of our model and the long-term value of our investments.
Potential gains for investors
Find out about the potential gains of a LiberTree investment. The table below illustrates the potential gains according to the three scenarios: unfavourable, median and favourable. These data gives you an informative view of what our investors can expect as a return on their investment with Treesition.
Investing in a LiberTree offers an average gain of €327, i.e. an annual growth rate of 12%, while the SereniTree offers a maximum gain of €65, ie a 3% AGR. These results reflect the differences between our investment products, allowing investors to choose according to their financial objectives and risk tolerance.
Market Study on Paulownia Wood
We carried out an in-depth survey of the current distributor offer. This study of 532 references from 23 international (America, Asia, Europe & Oceania) suppliers specialising in Paulownia wood enabled us to obtain an average distributor price of €2,754/m³. This value is higher than our estimate because it includes the costs of processing, transport, distribution, the percentage of losses (breakage, theft...) and the reseller's margin. For more information on this study, please do not hesitate to book an appointment with us.
Risk management by Treesition (ADAE SA)
To reduce the risk to its investors, Treesition has put in place various preventive measures:
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Before each plantation, an environmental study, a soil analysis and applications for planting permits are made.
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A contract is then signed with the landowner and/or farmer to define the legal framework of the collaboration and the rules to follow.
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Once the first 2 steps are completed, a supplement to the information note is introduced to announce the sale of additional trees.
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You can buy your trees and benefit from our great solution.
We encourage you to read our Information Note before making any investment.
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