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FIM, the specialist investment manager of sustainable real assets, is pleased to announce the opening for new subscriptions of both the FIM Timberland LP and the FIM Solar Distribution LLP.

FIM, the specialist investment manager of sustainable real assets, is pleased to announce the opening for new subscriptions of both the FIM Timberland LP and the FIM Solar Distribution LLP.

Sustainable Real Assets

A staggering $8.4 trillion of global pension fund money was allocated to alternative assets in 2014, an increase from just 5% of their total portfolios in 2001 to 25% in just over a decade.

An interesting component of this significant figure is sustainable real assets, which are gradually becoming a more important element in investors’ portfolios.

Sustainable real assets - specifically timberland and renewable energy - are alternative investments that deliver a compelling, low risk asset backed return in today’s uncertain economic climate. Furthermore, investment returns are not correlated to the listed stock or bond markets.

For over 35 years, FIM has been leading the field in sustainable real asset investments, delivering strong, inflation protected returns to its clients. FIM target a 7% annual return, but historically the returns generated by our Funds have exceeded this.

Why sustainable real assets?

Sustainable real assets first and foremost are tangible and provide a compelling and stable return.

FIM’s two Funds can provide either a high and stable income distribution, thereby reducing investment volatility (as is the case for the FIM Solar Distribution LLP), or assured capital growth, through the biological growth of the crop (as is the case with the FIM Timberland LP). Making an investment into both Funds can achieve a balance between growth and income for an investor.

Trees have known biological growth rates based on many decades of evidence from UK forests. Solar generation can also be forecast with a high degree of confidence because the variability of annual output is low.
Over the last 10 years, both timber and power prices have increased at an annualised rate above inflation and FIM expect them to continue to provide a strong inflation hedge.

Timberland and solar parks provide exposure to rising demand for resources – specifically timber and energy – as the global population continues to increase.

Sustainable real assets also harbour a rare diversification characteristic, they reduce the volatility in a portfolio. Timberland has no evident correlation with listed markets and has a lower level of volatility. FIM have observed the same characteristics with its investments in renewable energy assets over the last decade.

Investment in these long term sustainable assets also addresses a growing investor requirement to deploy capital in an ethical and socially responsible manner.

Why FIM?

For over 35 years FIM has been investing in Sustainable Real Assets. FIM manages the two largest unlisted timber Funds in the UK, one of which is called the FIM Sustainable Timber and Energy LP and has a 20% allocation to renewable energy. It has delivered 13.6% annualised returns since 2010 and has net assets of £128 million.
With over £630 million of assets under management and a long track record of delivering excellent investment returns for its clients, FIM is well placed to acquire and manage these type of investments successfully for investors.

Directors and senior staff have over 70 years of combined experience in alternative assets, specifically timberland and renewable energy.

FIM is the only Fund Manager in the UK providing highly structured tax efficient investment solutions for high net worth clients in both of these two asset classes. The unlisted structure of its Funds ensures that they are uncorrelated to listed markets, whilst making these asset classes more accessible (investments start from just £40,000). Both Funds qualify for 100% relief from inheritance tax after two years of ownership and provide further tax advantages.

FIM’s fees are very cost competitive, particularly for a Fund manager in alternative assets. The average annual Ongoing Charge Figure for its Funds is circa 0.75%, which is significantly less than the fees of many Fund managers of mainstream equity portfolios.

FIM aim to provide liquidity in the secondary market, by matching Vendors of shares with potential Purchasers.

Why invest now?

Sustainable real assets are an increasingly important component in investors’ portfolios. FIM believe that now is an opportune time to acquire these assets, in order to benefit from expected increases in their values.

Timberland:
• The outlook for timber price rises is strongly positive, based on increasing demand and constrained supply:
o Recovering demand in the developed world following the global financial crisis, as evidenced by strengthening housing starts in both the UK and the US
o Demand in the developing world, which never fell during the financial crisis, continues to rise, driven by urbanisation and increases in average income
o New markets for wood in biomass and engineered wood products will create additional sources of demand
• The above three factors have never combined simultaneously before
• Furthermore, supply is becoming ever more constrained, due to restrictions on illegal logging and competing land uses
• As timber prices rise, land value also increases as its revenue generating capacity improves

Solar:
• The low current electricity prices of £35 to £40 per megawatt hour (MWh) mean that there is substantial potential upside to an investment made now, if electricity prices rise as expected in the medium term
• Buying operational solar parks that have locked in 20 years of an index linked government subsidy is an opportunity that is unlikely to arise again, due to changes in the level of subsidies
• FIM’s view is that these low electricity prices cannot last for long and FIM expect them to rise, delivering strong returns to investors:
o 4 large coal fired power plants, representing over 5% of UK supply, will close in the coming months and all large scale coal fired power stations will be decommissioned by 2025, putting increasing pressure on the balance of supply to meet demand
o Expected new build gas fired capacity is not being built as power prices need to reach over £70 per MWh to make such plants economic
o The recent Government set contracts for new nuclear, at over £90/MWh, provide a further marker for future power prices
o New nuclear will also take a lot longer to become operational than many expect and prices will need to move higher sooner to keep the lights on

The search for income is becoming an ever greater challenge, with many companies cutting dividends to shareholders and bonds in some cases providing negative real returns. FIM’s Funds offer predictable cash flows to investors.

Conclusion

In summary, FIM believe that sustainable real assets provide a compelling investment opportunity with strong returns.

FIM is an investment manager with hard won experience and a long track record of structuring tax efficient products that allow investors access to these asset classes.

This is an opportune moment for investors to take advantage of an expected increase in asset values, as a result of forecast improving timber and electricity prices.

Enquires
Edward Daniels
+44 (0)1451 843094
edward.daniels@fimltd.co.uk

This press release was distributed by ResponseSource Press Release Wire on behalf of FIM Services in the following categories: Personal Finance, Business & Finance, Construction & Property, for more information visit http://pressreleasewire.responsesource.com/about.