10 Ways to Succeed in Forest Investment

A Guide to Building Profitable and Sustainable Forest Investments

As I write this, I’m preparing for an impact forest investment roundtable that I’ll be running. In early conversations with participants, one pointed out the importance of distinguishing between fundamentally different investor objectives. 

Some investors are looking for real assets — that is, ownership of, or collateral in, land and timber. Others are motivated by carbon and conservation outcomes. Add to this the diversity of investor types and the instruments they use, and the landscape becomes complex. (That broader topic deserves its own article — watch this space.) 

Still, whatever your objectives, there are common factors that increase your chance of success. These are my 10 ways to succeed in forest investment. 

10 Ways to Succeed in Forest Investment 

To the reader: these success tips refer to investment strategies that invest into forest assets themselves, and though the themes will resonate for more service or tech-based investments – the examples are specific to forestry investment activities. 

1. Alignment with your investment philosophy and objectives 

The forest asset passes the sniff test of aligning with your values and needs 

The starting point is simple: does the asset fit with who you are as an investor? Too often, opportunities are evaluated on their financial promise alone, but forest investments are long-term and complex — they need to align with your philosophy. Think about how the asset matches your investment vehicle, desired level of control, liquidity requirements, time horizon, geography, end markets, and sustainability goals. If any of these feel unclear, raise the questions directly with the deal proponent. You should walk away with confidence that both the asset and its manager can deliver on your objectives. 

2. Track record of your asset manager 

The manager has experience in carrying out the investment activities AND achieving your investment objectives (financial returns and/or impact outcomes) 

A forest doesn’t produce returns on its own — it must be managed. Success rests heavily on whether the manager has done this before and can do it again. A capable manager will be local to the asset, familiar with the relevant forest management regime, and equipped with sustainability expertise suited to the environmental and social setting. Strong governance matters as much as silviculture. And importantly, your manager should understand not just how to grow and manage trees, but how to navigate the value chain and bring timber or carbon products to market. 

3. Risks are identified and mitigated 

Understand the macro, sector-specific and indirect value chain risks associated with your investment and mitigate and monitor them 

Forestry carries risks that evolve over time — risks you need to understand and actively manage. Some are sector-specific: wildfire, drought, storms, pests, and disease can all undermine asset performance. Others are operational, such as the logistics of harvesting, transport, or processing. Land and carbon tenure can introduce additional complexity. And then there is social risk: the potential loss of license to operate, or reputational risk if even a minor or unrelated incident gets into the media. Identifying, mitigating, and monitoring these risks is not a one-time exercise but an ongoing process throughout the life of the investment. 

4. Validate the business and investment case 

The valuation, business plan, budget and operational plan are realistic 

Not every appraisal, business plan or operational plan is as solid as it looks on paper. In popular jurisdictions, inflated appraisals are a recurring issue — assets are sometimes valued in ways that don’t reflect actual timber or carbon market potential. On the operational side, greenfield investments can suffer from overly ambitious planting plans that fail to account for seasonality or local capacity. A credible manager will present a valuation, business plan, budget, and operational plan that are realistic and grounded in experience. 

5. The asset is investment-ready 

The proponent has a robust data room, addressing all your questions – even if the response is uncertain  

When evaluating an opportunity, look for a proponent who is truly prepared. A robust data room is key. Unknowns are expected — but they should be acknowledged and managed, not ignored. For example, an entrepreneurial proponent may have weaker forest management data, while a technically strong NGO or forest expert may lack robust governance or financial systems. Investment-readiness means the appropriate expertise is brought in, information gaps are known and there is a plan to address them. 

6. Partnerships 

Partnerships to achieve multiple objectives are strategically leveraged 

Partnerships often strengthen a forest investment, especially in complex landscapes or when multiple objectives are at play. Universities or NGOs may provide biodiversity monitoring, while NGOs can lead social engagement. In other cases, offtake agreements with processors or carbon credit buyers can help secure markets. These partnerships are not always necessary, but when well-designed they add resilience and credibility to the investment. 

7. Investment Management System 

Transparent and holistic reporting framework in place to continuously evaluate performance for a range of objectives 

Because forestry is long-term, financial reporting alone is insufficient. A successful manager will have a framework that integrates financial, operational, and sustainability performance, with clear KPIs and regular reporting. Investors should also expect opportunities to provide feedback and request adjustments. Independent appraisals at intervals during the holding period add another layer of accountability and assurance. 

8. Certification 

Appropriate certifications have been identified, and the asset is eligible to achieve them 

Certification is one of the best safeguards for forestry investments — and can create real value. Standards for sustainable forest management, sustainable biomass, carbon, or chain of custody are common examples. Sometimes certification delivers a price premium; in other cases, like carbon, it enables credit sales. Holding certification at acquisition is not essential, but the asset must be eligible. If certification has been revoked or cancelled in the past, ask why, and assess what that means for your risk exposure. 

9. Plan your exit early 

Forest assets are illiquid. Know what your options are and plan your divestment in advance 

Forest assets are illiquid, and exiting requires foresight. Even in long-term holding strategies, you should know how you will divest when the time comes. Planning often needs to begin more than a year before you want to exit. Possible buyers may include institutional investors, private investors, or value chain players such as processing companies. Emerging carbon and nature markets may also provide new opportunities. Aligning your exit strategy at an early stage with the manager is critical. 

10. Have asset-specific expertise in your corner 

Ensure you have the appropriate forestry-specific strategic and technical expertise at hand 

You don’t need to be a forestry expert yourself — but you do need one on your side. This could take the form of an experienced co-investor, an independent advisor, or a technical consultant. Their role is to ask the tough questions, challenge assumptions, and ensure the asset manager’s decisions hold up to scrutiny. Having that expertise in your corner is often the difference between success and failure. 

Are you ready to succeed? 

Forest investment can generate strong returns while delivering climate, nature and social benefits. But success depends on careful preparation and the right expertise. 

If you’re considering an opportunity and want experienced eyes on whether these ten factors are being met, I can help — either with targeted ESG and impact due diligence or broader advisory support. I also collaborate with trusted partners to ensure all bases are covered. Reach out and let’s discuss your opportunity! 

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