Atypical Financial Assets
‘Atypical Financial Assets’, also known as ‘Alternative Investments in Movable Assets and Agricultural Operations’ in Belgium and ‘Tangible Assets’ in Switzerland, are investments that offer the possibility of a financial return (sic the French Financial Markets Authority). These ‘alternative’ investments concern renewable energies, watches, wine, art or even trees...
Treesition's trees, sold under the names ‘LiberTree’ and ‘SereniTree’, are considered ‘Atypical Financial Assets and Agricultural Operations’ for which an Information Note and a Supplement has been published by Treesition (ADAE SA).
Tree Investment, how much can I earn from it?
Case Studies
Wood is one of the so-called ‘Anti-fragility’ safe havens, a principle conceptualised by Nassim Taleb, which explains that: ‘Some objects benefit from shocks. They thrive and grow when exposed to volatility, stress, disorder and chance’.
In simple words, the price of antifragility assets strengthens during crises.
The above graph shows us the evolution of the price of Oak Tree since 2009 (source : Mercuriales Trimestrielles, CEEB), in Q4 2009, the price per m³ of oak plot was 1022€ against 1905€ in Q3 2022, this represents a price growth of 86%.
We can also observe that during the COVID-19 crisis, the price has increased by about 450€/m³, which demonstrates the anti-fragile character of the wood.
As well as Paulownia,
Oak Tree is used as a Furniture Wood.
Oak Tree
What about Paulownia wood?
Paulownia wood market is an emerging market in Europe, therefore there is currently no reference value for its resale price.
Paulownia wood prices can be estimated on the basis of the prices of other more well-known types on the market for several reasons:
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Quality characteristics: Wood price depends on its quality characteristics, such as density, strength, durability, colour, etc. Comparing the quality characteristics of Paulownia wood with other types of wood such as oak, pine or lumber, but also with energy wood for waste utilization, we can get a rough idea of the value of Paulownia wood.
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Market demand: Wood prices are also affected by market demand. As Paulownia wood is used for similar products or applications as oak, pine, timber or firewood, it can be useful to compare the prices of these types of wood to get an idea of the level of demand and the value of Paulownia wood in the market.
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Economic context: Wood prices can also be influenced by economic factors such as supply and demand, production costs, taxes, regulations, etc. Comparing prices of Paulownia wood with other types of wood in a similar economic context, we can get an idea of the relative value of Paulownia wood compared to other types of wood.
In summary, the price estimation of Paulownia wood can be based on the price of Oak, Pine, Lumber and Firewood, as this allows the quality characteristics of the wood, the market demand and the economic context to be taken into account in order to get a rough idea of the relative value of Paulownia wood.
We have thus created an indicator based on the values of the woods mentioned above, each of which represents an aspect of the uses of our trees wood. Oak Wood represents the furniture side of Paulownia, Pine Wood highlights the value of lower quality Paulownia wood, Firewood values Paulownia waste and Lumber shows the use of lower quality visual Paulownia wood.
This way we can see a Paulownia "trend" over the past years and its future development.
We have synthesised the average prices calculated in the graph below:
The average value of this indicator at the begin of 2023 indicates a potential Paulownia wood valuation of €840 per m³. This indicator is based on the estimates and interpretation of the analysis carried out by Treesition and does not rule out the risk that the price of Paulownia wood will develop differently from traditional wood prices.
Paulownia timber resale price in February 2023
In order to estimate the potential income of our investors, we have monitored the prices on the Paulownia wood market in 2023. We have listed the prices per cubic metre of 8 references from 4 European suppliers of Paulownia wood, on the basis of which we have estimated the average resale price of Timber (see photo).
The timber corresponds to the processed wood.
We have synthesised in the table below the data collected in the framework of our price monitoring:
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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.
Potential Income for the Investors
To estimate the potential income of our investors who have chosen the "LiberTree" option, we have established two scenarios which are shown in the table below. According to our Paulownias' exploitation scheme, we carry out a first cut, which can take place between the 6th and 8th year, on a maximum of 50% of the trees in the plot.
This thinning promotes the growth of the remaining trees and maintains the ecosystem in place. The trees from this first harvest are valorised by a rotary cutting process.
The final harvest of the plot is then carried out on the remaining trees, which are valued as Timber.
The income from these two scenarios is pooled for the same plot and paid out to investors at the end of the investment period.
The table below presents the details of the valuation case by case:
SereniTree & LiberTree comparison
We encourage you to read our Information Note and its Supplement before making any investment.
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