They usually take years to grow to maturity and may not offer the excitement of tech stocks or emerging market equities, but trees are continuing to attract specialist investors, as highlighted by the launch today of a new forestry fund.

The renewable energy investments firm, Reinvest Partners, has launched a unit trust, called RE-Forest Fund LPP. The launch is being carried out with Consortium IM, a provider of offshore investments. The fund is a feeder fund that puts money into a Luxembourg SICAR fund, also managed by Reinvest Partners.

The SICAR fund gives retail investors a global investment platform normally reserved for institutional investors, Reinvest said in a statement. The investment strategy is focused on buying land and plantations within Europe, South America and Asia Pacific.

In recent years, figures have shown that forestry investing can provide steady returns even while regular markets are hit. The National Commercial Realtors Investment Fiduciary – T Index showed that returns in 2008 for timber were 9.45 per cent, which contrasts with the double-digit losses in equities that year,  according to Trilogy-GFF Partners, a US forestry investment and advisory company interviewed by this publication last year. There are a number of forestry funds, and managers typically like to stress their low correlations to equities, bonds and other more mainstream asset classes.

Forestry in the UK and some other countries has historically been a tax-efficient investment, although some of those tax breaks have been removed. The sector is not without risks, such as fires, floods, disease and sudden changes in land use regulations, which is why investors are typically urged to spread their holdings by geography, species and age of tree type.

Focused only on forest plantations, RE-Forest will manage various tree species such as teak, conifer and eucalyptus that each respond to different commercial markets from construction to renewable energy.

The fund aims to deliver stable and low risk returns (10 per cent-12 per cent). RE-Forest Fund LP, the UK feeder fund, is an onshore, tax efficient, limited liability structure. It carries an expected investment term of 10 years.

There is a minimum subscription per investor of £20,000 for pension funds and other tax-exempt investors (investing in the Trusts).

To view another WealthBriefing article on the issue, click here.