Forest Investment Analysis

Investment analysis services support investors and forest companies in capturing the real value of forest assets by accurately modelling income streams from timber production combined with the option to integrate non-traditional income streams such as those from carbon impacts, carbon crediting and biodiversity impacts (or other variables of interest).

Benefits

  • In-depth analysis and due-diligence of the forest value components, including carbon crediting potential
  • Woodflow and harvest removal scenario analysis and identification of their impacts on asset value
  • Cost-benefit analyses
  • Cost-efficient and timely service execution by leveraging Simosol’s state-of-the-art forestry IT solutions, such as IPTIM Assets
  • Possibilities for integration with other services and products

Target audiences

  • New and existing forest investors
  • Impact investors
  • Forest funds

Our approach to forest investment analysis

Capturing the true value of forests

Simosol’s investment analysis services advise our clients on how to capture the real value of forests, regardless of the applied business model, be it in timber or tonnes of carbon.

Forests as an investment asset class is nothing new. It has many preferable characteristics, providing resilience and diversity to any investment portfolio. However, putting a value on forests is much trickier than for most other real assets. Forests are biological assets whose physical quantity is in constant flow as a result of natural growth dynamics and applied management activities. Importantly, this physical quantity usually serves as the basis for the valuation of a forest. 

Forests are becoming an increasingly attractive asset class to invest in, not only for their timber-related value, but also for their natural capability to capture carbon from the atmosphere and store it in the forest biomass. This is opening completely new ways for the analysis of forests as investments and the applicable business models which can now consider carbon offsetting and carbon crediting.

Automated forest modelling for investment purposes

Simosol has long experience in supporting our clients in making investment decisions. With the use of our IPTIM forest modelling tools we have been able to provide rapid forest asset transaction support both in boreal and temperate forest as well as in tropical forest plantation settings.

We offer woodflow and cash flow calculation services designed for forest investors who require timely assistance with forest estate transactions. Simosol’s optimization tools can be used to identify the management schedules and operations that would maximize the net present value of a forest asset. In addition, tailored management scenarios can be run to suit better our Clients management objectives, for example to consider the impact of putting a price on carbon sequestered in the forest.

Fertilization cost-benefit tool

Forest owners and managers face multiple situations where they have to make forest management decisions and justify the profitability of those decisions. Such decisions can be for example whether to apply fertilizer in a forest, whether it makes financial sense to advance or delay a harvest or any other silvicultural activity with clear cause and effect.

To enable more efficient decision-making, Simosol developed a software service which calculates the return on investment of fertilization activities. The tool supports the Client’s operational staff to make advised and systematic decisions on fertilization thus increasing their productivity and the overall profitability.


What software is used

Software

Strategic planning

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Software

Metsä ja Puut automated valuation

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Software

FRESCOS carbon calculation

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How this solution was used

Reference

Annual valuation of forest investment targets

Valuation of forest investment targets in Finland, Ireland, Latvia and Estonia. Wood flow and cash flow modelling for forest assets.

More references

Our People to Help You

Miika Malmström

Head of Forest Valuations

+358 503038066

Miika is heading Simosol’s forest valuation business including the implementation, development and sales of the related services and products. He has nine years of diverse project-work experience in the forest sector including assignments related to forestry, forest industry, forest policy and field experience from 16 different countries. His main expertise is forest economics with a focus on forest valuations and investments.

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