APC Securitization SA: Most Innovative Forestry Bond Issuer Global 2015

Investor interest in “alternatives” stands at an all-time high. In excess of $7.5 trillion has already been ploughed into non-traditional economic sectors such as sustainable forestry management – a relatively new endeavour that couples the large-scale approach of the forestry industry to the forward-looking stewardship principles pioneered by environmentalists.

Sustainable forestry is ideally suited to satisfy the demand from institutional investors for extended time horizons, low-carbon footprints, and stable returns – trees grow and mature at predictable rates and do so regardless of market conditions. Leading investment experts are almost unanimous in their recommendation that sustainable forestry be an important, if not essential, component of any well-balanced investment portfolio.

Timber is the third-most traded commodity in the world with an aggregate annual volume of around $600bn. As an asset class, timber is tough as nails, returning an average of 15.1% annually since 1987 – more than almost any other class of investable assets. With the world economy picking up pace, along with its interest in renewables, demand for timber is expected to continue to outstrip supply well into the future.

Within the forestry sector, Asia Plantation Capital is spearheading the exploitation of carefully and sustainably managed agarwood timberlands. Agarwood produces essential oils, chips, and powder. The dark resinous heartwood has been traded for thousands of years for its distinctive and highly-valued fragrance. Since the aquilaria tree was listed as a potentially threatened species in 1995, top-grade agarwood – which is obtained from the tree – has becom eone of the most expensive commodities in the world.

The CFI.co judging panel fully agrees that sustainable forestry presents investors with an attractive, safe, and environmentally sound option. The agarwood plantations of APC, producing a scarce – and thus highly-priced commodity – stand at, or near, the apex of the forestry sector. With the launch of both a securitised capital growth bond and a securitised fixed income and capital growth bond, APC Securitization SA – part of Asia Plantation Capital – has introduced two well-designed instruments that environmentally-aware investors may leverage to put their capital at work not just for personal gain, but for the benefit of the wider society as well. The judges declare APC Securitization SA winner of the 2015 Most Innovative Forestry Bond Issuer Global Award.