FAQs & Glossary

FAQs & Glossary2023-08-01T16:16:53+12:00
What can I invest in now?2023-11-14T15:23:39+13:00

Forest Enterprises’ current forestry investment opportunity is the Bideford Forest Investment. Bideford is an established second-rotation forest offering investment returns from a mix of assets, being timber, carbon credits and land.

Click here to learn more about the Bideford investment and for a copy of the Product Disclosure Statement. Or contact us on 0800 746 346 or invest@forestenterprises.co.nz

Why invest in forestry with Forest Enterprises?2023-05-03T14:49:15+12:00

The choice of company you invest with is most important. Invest with a company with a proven track record of taking a responsible approach to asset management and adding value for their investors. As the first direct forestry investment company established in New Zealand, our 50-year record of providing high-quality, profitable forestry investments speaks for itself.

Learn more about our investments here, and about us here.

What are Forest Enterprises’ harvest and environmental management practices?2023-05-03T14:57:13+12:00

New Zealand’s National Environmental Standards for Plantation Forestry (NES-PF), resource consent conditions and district plan rules set the mandatory regulations for the environmental management of forestry activity, from planting to harvest. Industry best practice sets additional standards.

NES-PF’s requirements cover harvest planning, logging operations, design and placement of forest roads and log processing sites (landings), the management of harvest run-off, and the volume of forestry debris left on site.

Forestry practices are changing rapidly to mitigate adverse environmental effects on sensitive land.

Forest Enterprises develops catchment management plans as part of the harvest planning and Resource Consent application process. This includes ensuring the harvest creates a mosaic of age classes within each forest to minimise the risk. Harvest of some areas in the lower parts of each catchment is planned to be delayed providing protection to downstream neighbours and/or waterways. An additional option is to move harvest operations around the forest more often to reduce the total cut-over size in any given area. An outcome of these harvest management strategies is a longer harvest time frame.

We implement additional natural and man-made slash management systems, and increase riparian strips (more of them, and wider). Alternative species such as Poplar, Willow and native species are present along riparian margins as they also provide the benefit of mitigating slash migration and sedimentation. Use of mechanised harvesting practices, such as remote-controlled tethered systems, helps reduce risk to the natural environment from harvest operations as well as to worker health and safety.

These are just a few of the many important management strategies implemented or planned.

Whilst there is a level of risk when harvesting, we remain positive that we have an excellent resource in terms of our contractor teams, staff and forestry assets; and with continued vigilance we can mitigate the effects and have continued very good environmental outcomes.

Read more here about our catchment management approach to harvesting. The development of these Good Practise Guidelines were led by Forest Enterprises co-owner and Gisborne Regional Manager, Dan Fraser. Dan and Forest Enterprises were recognised for this leadership in 2021, winning the Eastland Wood Council Environmental Management Award.

What does being a ‘licensed manager’ mean?2018-07-31T13:49:25+12:00

Under New Zealand law, issuers, managers and promoters of registered Managed Investment Schemes (MIS) must hold a license to do so. Forest Enterprises Limited is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds) which are primarily invested in forestry assets.

We have met (and are required to continue to meet) high minimum standards of governance and operational and financial management, and have provided evidence to New Zealand’s financial markets regulator of robust systems and processes for keeping investors fully informed and engaged with their investment.

Forest Enterprises Limited is required to comply with New Zealand’s financial markets regulations governing the conduct and activity of a MIS Manager, which includes routine audits by the Financial Markets Authority.

You can learn more about our status as a licensed manager on our Legal page.

What is a Managed Investment Scheme (MIS)?2019-10-22T15:14:27+13:00

Of the 61 forestry investments managed by Forest Enterprises, 49 are Managed Investment Schemes (MIS), registered under the Financial Markets Conduct Act 2013 (FMC Act) and regulated by the Financial Markets Authority. Forest Enterprises Limited is licensed under the FMC Act to manage Managed Investment Schemes (excluding managed funds) which are primarily invested in forestry assets.

Generally in a MIS –

  • a group of people are brought together to contribute money in return for shares in the scheme
  • money is pooled together and used in a common enterprise
  • financial benefits are produced principally by the efforts of another person under the scheme
  • a ‘responsible entity’ (a licensed Manager) operates the scheme meaning that investors do not have day-to-day control over the scheme’s operation

Property investment such as forestry (land and trees) is a common type of MIS. Typically, an MIS manager will exercise skill, and provide expertise and decision-making in managing the forest and administering the investment. The Supervisor acts on behalf of the Investors to supervise the performance of the Manager and ensure it complies with its obligations under the FMC Act and the Governing Documents.

How can I pay the Calls?2019-11-28T15:28:51+13:00

By far the most convenient way to pay your Calls is by direct debit. But you can also pay by charging to a VISA or MasterCard, by transfer from your bank account to the investment trustee’s bank account (Trustees Executors Limited), or by cheque.

To discuss or arrange your payment options, contact us.

Is there a lump-sum full payment option for new issue investments?2019-10-22T15:14:27+13:00

No, we do not offer a lump-sum full payment option for new issue investments. The main reason why is that forestry is by nature a contributory investment. A crop of trees is planted, intensively tended during the first 10 years (the pruning and thinning) then managed through until harvest over a 25 to 30 year period. The only way the future cash flow requirement to pay for this work can be converted into a lump sum is by ‘guessing’ future inflation, real cost movements relative to inflation, interest and taxation rates. It is not possible to accurately guess these variables over the 25 to 30 year life of a forest.

The consequence of an incorrect lump sum calculation will inevitably disadvantage you, the investor, which is the main reason why Forest Enterprises does not offer this option.

Other reasons against a lump-sum option

Even assuming someone could accurately guess the variables and arrive at a lump sum amount, there are other major reasons against lump sum full payment of your forestry investment.

Shift in Control from You to the Manager

Your strongest negotiating lever is your money. If you have fully paid your investment you have little negotiating power and the Forest Manager (the Manager) is in a strong position. Prudent investment practice should always empower you the investor, not the Manager.

Temptation on the Manager to Spend the Funds Available

With lots of money in the bank during the early years, the Manager might be tempted to spend it on the forest e.g. ‘put in that extra track’, and generally to spend more than anticipated in the original budget. Investors can only restrain the Manager if it has to justify any additional expenditure and this is best achieved when it has to ask you to pay for it.

Pressure on the Manager to Cut Corners

If in the latter years of the investment the remaining funds are insufficient to complete the work originally intended, the Manager will be under extreme pressure to reduce expenditure by cutting corners. Doing so will inevitably compromise forest quality, and consequently investment return. This is not in your best interests.

Locking into a Forest Management Regime

A lump sum calculation can only be attempted if fixed assumptions are made, including forest management regime assumptions. Consequently a change in forestry management to accommodate new and recommended developments that could enhance your forest and your return would probably not be possible. This is also not in your best interests.

Management of the Resulting Cash Fund

Full payment of a substantial future cash flow creates a large cash fund that must be managed professionally, which in itself creates an unnecessary investment risk.

Who owns the land?2019-10-22T15:14:27+13:00

Investors in our Limited Partnerships own the land as well as the tree crop through their ownership of shares in the Limited Partnership. The land is not owned by the Manager or any other third party.

Under the Financial Markets Conduct Act 2013, there is a requirement for the Supervisor (or its appointed custodian) to be registered on the title to the land and to hold the land in trust for Partnership or Limited Partnership, as an investor protection. Limited partnerships in forestry managed investments which were established before the Act came into force have the benefit of an exemption, so the land is registered in the name of the limited partnership, with an encumbrance on the title which requires the Supervisor’s consent to any dealings.

Ownership of the land is a key feature of a Forest Enterprises investment and gives investors more control over their forests. It eliminates commitments such as annual rentals, payments for access or the sharing of harvest proceeds. And there is the potential to enjoy gains from any increase in the value of the land over time. Learn more about our Investment Structure here.

What tree stock is used?2016-05-24T17:56:34+12:00

We use the best possible and most appropriate tree stock for each particular forest, taking into account the individual site, genetics, tree stock availability and the cost-benefit from an investment perspective.  The test is always whether the tree stock used can be converted into the highest investor return.

Are the trees insured?2023-09-04T15:48:33+12:00

Yes. Your forest is insured against fire until harvest which includes the cost of fire-fighting, forest re-establishment and claim-related costs. Public liability is also in place under a separate policy. Contact us for the current summary of the forest insurance cover.

Am I truly protected by limited liability?2019-11-28T15:30:46+13:00

Yes, you are in our Limited Partnership investments as a limited partnership is a corporate structure similar to a company which offers limited liability to investor partners. Your liability is only for what you have invested, including any outstanding Calls requested but not yet paid. You have no personal liability for any unpaid Calls of other investors.

You can find out more on the Investment Structure page.

What do you mean by ‘direct investment’?2017-07-07T09:15:42+12:00

There are two main ways you can invest in forestry.

You can invest directly into the ownership of the trees (which normally also includes ownership of the land on which the trees are growing), or indirectly through shares in a listed forestry company or other managed fund. We refer to these two options as ‘direct’ and ‘indirect’ investment.

Forest Enterprises’ investments are a direct investment and do include ownership of the land. Although the direct and indirect investment options share a number of key characteristics, the most important being their sole focus on plantation forestry (mainly Radiata pine), they also have important differences.

Direct forestry investments normally focus on one block of land, comprise a group of investors and relate to one rotation of trees. A crop of trees is planted, tended and eventually harvested from the block of land by a manager on the investors’ behalf.

The investors are closely involved with their forest and participate in decision making. They can identify directly with their forest, visit it if they choose, and they know exactly where their money is going and what it is being spent on. Because they are growing one crop rotation there is no income from the forest until harvest, which occurs at the end of the investment. Investors therefore have to fund the cost of the work occurring in their forest each year and do not receive annual dividends.

Can I sell or transfer my shares prior to harvest?2021-01-11T10:40:20+13:00

Yes, you can do both.

Being able to liquidate or transfer shares prior to harvest is a key feature of a Forest Enterprises investment. We have facilitated the sale of established Forest Enterprises investments for many years and never failed to find a buyer for an investment at a price acceptable to both buyer and seller.

There are normally a few months around balance date when the secondary market is not available to investors while the valuations are being updated.  For the time being, the secondary market is suspended for Forest Enterprises’ harvesting investments.

If you are considering selling your shares, either privately or via Forest Enterprises, or wish to transfer shares to family members or into or out of a Trust, please contact our Customer Services Manager, Sean Roberts. Please note a Listing Fee applies and Brokerage is charged on a successful sale.

What are my shares worth?2020-07-14T12:08:40+12:00

When the Financial Statements are prepared each year, an update is made to an investment’s Indicative Value at Balance Date (for a typical share unit of 200 shares). An update to the Indicative Value may also be provided in the Investment Report prepared when a client is selling their Forest Enterprises shares.

If you have shares in a Forest Enterprises Limited Partnership investment, you will find the updated Indicative Value usually at the back of the annual Financial Report.

To download and read the latest annual reporting for your Forest Enterprises forest investment (Managed Investment Scheme), search by ‘scheme name’ on the Companies Office Disclose Register.

When will my forest be harvested?2020-07-14T14:11:48+12:00

With many of our forest investments approaching harvesting age, this question from investors is understandable because it is an indication of when to expect investment returns.

Indicative harvest dates have been reported each year in the investment’s annual Financial Report, reflecting the expectations in the original Prospectus to harvest exactly at tree age 28 years. However, these dates were not definitive and were, in reality, unlikely.

Harvesting throughout New Zealand presently faces a number of constraints, namely the combination of predicted high log volumes, status of essential infrastructure such as public road quality and capacity, rail and port capacity and log storage, plus contractor resourcing and availability (logging crews and trucks).

Such practicalities mean that the harvest of our investors’ forests is likely to begin a little earlier and finish later than originally expected. As a responsible forest manager, we must also harvest in a way that protects the land and minimises environmental impact, and this approach necessitates longer harvest timeframes.

Investors will note in the December 2019 and March 2020 annual Financial Reports that the Projected Cashflow has been revised to reflect a longer harvest period. These dates may still change.

As we get closer to harvest, we will be in touch with investors to discuss our proposed plan for the best way to harvest your forest.

How much income will I earn from harvest?2020-01-24T16:39:07+13:00

Closer to harvest and when the harvest plan for your investment forest has been communicated with investors, we produce an updated Cashflow Projection for your investment based on the latest available log price series, latest cost estimates, the mix of hauler vs ground-based logging operations, and the pre-harvest inventory of your forest’s log grade mix. The cashflow will show the projected annual (and total) income and expenses for each year until the conclusion of the investment.

The cashflow projection is then updated each year and included in the investment’s annual Financial Report.

If you have shares in a Forest Enterprises Limited Partnership investment, you will find the updated cashflow projection usually on page 19 or 21 of the annual Financial Report. The Financial Report also provides an update, as of balance date, to the Expected Gross Harvest Return and Stumpage Calculation.

To download and read the latest annual reporting for your Forest Enterprises forest investment (Managed Investment Scheme), search by ‘scheme name’ on the Companies Office Disclose Register.

Why is there a difference between my taxable income and the distributions I’ve been paid?2023-04-06T16:33:24+12:00

Income earned by the limited partnership in a tax year, such as from harvest, is taxable at the investor level. This taxable income (or loss) is noted on your annual Tax Details Statement. Broadly speaking, taxable income is calculated on investment income (e.g. log sales) less expenses (e.g. road building, replanting) for the year. Investors may or may not have seen any cash yet from this income.

Distributions paid to investors is simply the surplus cash available. What is available depends on the timing of payment for logs we’ve supplied, and what expenses need to be met throughout harvest. Road building is classified as a capital expense that we must depreciate. This gives rise to a difference between the cash available to distribute and the accounting position. Learn more: “How do roading expenses impact my taxable income?”

Throughout the harvest programme, a small amount of taxable income is retained to meet expenses, such as to fund the construction of roads, replant harvested areas or meet general scheme expenses. It is more efficient for us to retain income rather than make further calls on investors. Timing is also a consideration. Income from one tax year can be paid in another, i.e. not all harvest income is paid (distributed) in the same year as the taxable income. Most retained income will be returned to investors, either through the depreciation charge in the investment’s financial statements or through the sale of the replanted trees at the conclusion of harvest.

Our aim is to pay surplus funds to investors as soon as possible, as this is your money and we do not want to hold on to investors funds any longer than necessary. See also: “Distribution”.

It is important that you declare the taxable income, not the distributed income, in your tax return. Declaring only distributed income may see you incur penalties from New Zealand Inland Revenue for under-declaring forestry income. Notes are circulated with the Tax Details Statement which can be shared with your accountant or tax advisor.

Contact Customer Services Manager, Sean Roberts with any queries.

What will my harvest income be this year?2020-07-14T12:07:23+12:00

An updated Cashflow Projection is included each year in the investment’s Financial Report. The cashflow will include the projected income and expenses for each year until the conclusion of the investment, and will therefore show if any income is expected for the coming year.

If you have shares in a Forest Enterprises Limited Partnership investment, you will find the updated cashflow projection usually at the back of the annual Financial Report. The Financial Report also provides an update, as of balance date, to the Expected Gross Harvest Return and Stumpage Calculation.

To download and read the latest annual reporting for your Forest Enterprises forest investment (Managed Investment Scheme), search by ‘scheme name’ on the Companies Office Disclose Register.

How will I be paid at harvest, and what about the tax?2021-05-04T11:38:07+12:00

Payments to investors from harvest cashflow will occur when surplus funds allow, and will be regular throughout the harvest programme. There are no set dates or amounts but we aim for quarterly payments of an economic amount. We will advise investors if any upcoming distributions in the harvest reports.

These are cash payments and tax has not been deducted.

Under current taxation law, the Limited Partnership (like an ordinary partnership) is not taxed at the partnership level. Instead, each partner is taxed individually, in proportion to their share of the partnership income. So a limited partner will pay tax on their share of harvest proceeds at their marginal tax rate.

Taxable income will differ to distributed income. See also “What’s the difference between my taxable income and the distributions I have been paid?“.

How do roading expenses impact my taxable income?2023-04-06T15:25:02+12:00

Building harvest infrastructure – roads and landings (log processing areas) – is a significant but necessary expense required to access, harvest and remove the valuable timber in your forest.

Roads are built throughout the harvest programme, but the primary outlay occurs during the early stages to establish the network, with maintenance generally occurring as harvest progresses. Roading expenses are paid in full to the contractor at the time of construction. But because it is not immediately deductible in full, the available cashflow for distribution to investors is therefore reduced.

Roading is generally a capital cost. New Zealand’s Income Tax Act 2007 requires us to claim depreciation on capital roading (not on road maintenance) in the investment’s financial statements at a rate of 20-25% diminishing value (DV). (Maintenance is recovered in full when it is incurred.) Because of this accounting treatment, there will be a difference between what the investment’s taxable income is and what is available for distribution to investors.

See “Why is there a difference between my taxable income and the distributions I’ve been paid?

What happens after the trees are harvested?2020-07-14T12:41:53+12:00

The areas harvested will be replanted the following winter, so that at the conclusion of harvest, most (if not all) of the land will have been replanted.

When the harvest is complete, the investment must be brought to a conclusion. Towards the end of the harvest programme, a decision is made whether or not to offer a new investment for the next rotation. If a new investment is not offered, the land and replanted trees are independently valued* and listed for sale, with the resultant net proceeds paid to investors. If it’s decided that a new investment will be offered, then the new investment becomes the purchaser of the land and trees.

The original investors (or their family) will have the choice of:
a) reinvesting (in part or in full) using their share of the proceeds from the sale of the land and the replanted trees,
b) transferring the shares to another entity like to a family member or family trust, or
c) receiving their share of the value of the land and replanted trees and exiting.

(* The valuer will include a contingency for roading to help offset any unclaimed depreciation. The land value does not include the cost of roading because investors have already claimed the majority of this expense through the depreciation in the financial statements.)

Will there be a surplus of wood when my trees are harvested?2020-07-14T12:12:48+12:00

During the late 1970s and early 1980s, the annual planting rate in New Zealand was between 50,000 and 60,000 hectares, a level to which we only returned in 1993. As the total forest estate increases, production will also increase, however New Zealand’s contribution to the world market is very small and represents only a fraction of the projected increased demand for high quality wood in Pacific Asia alone.

What is the Emissions Trading Scheme (ETS)?2019-10-22T15:14:27+13:00

The ETS is a cap and trade mechanism that has the effect of putting a price on carbon (and other greenhouse gases) in an attempt to reduce the carbon emissions in New Zealand.

The primary unit of trade is the New Zealand Unit (NZU). NZUs are also called carbon credits.

  • Certain entities within the ETS that emit greenhouse gases must pay units to the government.
  • Entities that remove greenhouses gases, like those in forestry, can earn units from the government, which they can sell to companies that emit.

Forestry entered the ETS on 1 January 2008. It was the first sector to enter, because of the importance of forestry to New Zealand’s ability to meet its international obligations for greenhouse gas emissions. Forestry is New Zealand’s largest carbon ‘sink’. As trees grow, they absorb carbon dioxide from the atmosphere and store it in their trunks, branches, leaves and roots.

By putting a price on greenhouse gases, the ETS encourages landowners to establish and manage forests in a way that increases carbon storage. All of the forest land managed by Forest Enterprises has the potential to earn carbon credits through the ETS.

The Scheme creates two types of plantation forests: Pre-1990 forest land (planted before 1 January 1990) and Post-1989 forest land (planted after 31 December 1989). Pre-1990 forest land is automatically in the ETS. Owners of Post-1989 forest land can join the ETS if they wish, and will gain credits and incur liabilities if they do so.

What about pests and disease?2017-07-07T09:16:06+12:00

Because the New Zealand forest industry is our third largest export earner it is of national importance and responsibility for protecting the forest estate falls to a number of government agencies. If the forest resource is threatened, the government acts.

Pests and diseases spread relatively slowly in forests, and it can take many years before any impact is felt. This gives the industry and the government a reasonable time period to eradicate or control any problem.

The forest insurance policy does not cover pests and disease.

Will the amount I pay increase over time?2019-11-28T15:10:12+13:00

Yes, it will. The figures set out in the information you received when first investing with Forest Enterprises are projections based on a number of assumptions and the actual costs at that time. Even with low inflation, costs will increase. All factors being equal, what you will pay in the future will represent the same buying power as the cost indicated in the relevant investment report (prospectus or product disclosure statement).

It’s important to remember three things. Firstly, Forest Enterprises has been in the business since 1972 and, having been through the entire forest investment life-cycle with our managed investments, we know what operations actually cost. Secondly, our credibility is on the line, and we are highly motivated to perform within budget. Thirdly, if inflation increases the costs (which are concentrated in the early years), it will also increase the returns.

When are you too old to invest in forestry?2019-11-28T15:27:44+13:00

In our opinion, no one is too old to invest in forestry!

Forestry investment is a long-term investment for around 26 years, but need not be, as your investment can be sold via a tender process which we can facilitate for you.

Many parents and grandparents appreciate the longer term of the investment as being ideally suited to an investment for their children or grandchildren.

Is there any risk of a claim under the Treaty of Waitangi?2017-07-21T12:09:22+12:00

The answer is an unqualified no. As all the forestry land in Forest Enterprises’ investment schemes is private land which has not been previously owned by a state-owned enterprise, it is legally protected from any Maori claims to the Waitangi Tribunal.

300 Index2022-10-20T13:56:03+13:00

A forestry term used to express the productivity of a site in terms of volume growth for Pinus radiata. It is the mean annual volume increment in cubic metres per hectare of a 300 stem per hectare Radiata pine stand at age 30 years.

As a measure of productivity used in modelling and forecasting tree growth and stand yield, it is relevant even where crops are not intended to be thinned to a stocking as low as 300 stems per hectare or grown to age 30.

(This methodology supersedes Site Index (SI), an indication of site productivity based on the expected mean top height of Pinus radiata 20 years from planting.)

Annual Report2021-06-14T10:17:51+12:00

The Financial Markets Conduct Act 2013 requires the manager of a registered Managed Investment Scheme to prepare an Annual Report on the affairs of the scheme during the accounting period ending on the balance date. The contents of the annual report are prescribed in Financial Markets Conduct Regulations 2014.

The Annual Report must be prepared and available on the Companies Office Disclose Register within 5 months of each balance date of the scheme, and then sent to every scheme participant. Forest Enterprises sends Annual Reports to investors together with the investment’s Financial Report (financial statements), 4 months after balance date.

The latest Annual Report for a Forest Enterprises’ registered Managed Investment Scheme can be read and downloaded from the Companies Office Disclose Register (select ‘Search for a scheme’ and type the forest name in the search box).

See also Financial Report.

Anti-Money Laundering (AML)2017-07-07T08:29:34+12:00

New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires us, as a financial services provider, to undertake due diligence on all new customers which involves gathering information about customer identity and residential address, verifying a customer’s identity, and undertaking ongoing customer due diligence and account monitoring.


The buyer or transferee of shares in a managed investment scheme.


The seller or transferor of shares in a managed investment scheme.

Balance Date2017-07-27T15:34:18+12:00

The financial year-end balance date. For a Forest Enterprises investment this is either 31 December, 31 March, 30 June or 30 September.


Replanting areas of dead or damaged trees to maintain target stocking rates, normally undertaken the winter following the planting of a stand.

Butt Log2017-07-07T08:37:24+12:00

The bottom part of a tree. A ‘Peeler Butt’ is the pruned bottom part of the tree, around 2m in length, used by mills to make veneer.


The name of the regular instalment payments by investors, required to meet their share of the annual budget for forest management and other services. The term also covers other contributions investors must make for the development and management of the investment which is prudent or necessary.

The largest amount of funding is required in Year One in order to buy the land and establish the treecrop. Lesser amounts are required from Year 2 through to about Year 9 to complete the pruning and thinning operations, to repay any initial mortgage borrowings and to pay the annual charges such as rates, insurance, maintenance and management. From about Year 10, the annual Call is required to cover the ongoing annual charges and is, therefore, a smaller charge.

Carbon Lease2017-07-20T17:03:16+12:00

All of the Post-1989 forests promoted by Forest Enterprises have entered into a into a commercial arrangement with a company called New Zealand Forest Leasing Ltd (NZFL), resulting in the carbon in the Post-1989 areas of the forest being leased to New Zealand Carbon Leasing (No. 1) Limited, a subsidiary of NZFL, in return for an annual rental. This means that generally the income for each Post-1989 forest is sufficient to cover the annual expenditure and the Call amounts are therefore $0.


Harvesting a tree crop by removing all merchantable wood from the site.


Wood which is free of knots and other defects. In Radiata pine this is grown on the butt log, being the pruned part of each tree (bottom 5+ metres approx). Knot-free Radiata pine is highly sought after and therefore the most valuable portion of each tree as the wood is used for decorative, furnishing and finishing timber purposes.

Cost of Timber2019-10-22T15:14:26+13:00

Cost of Timber is a technical area of New Zealand Tax law relating to deductions for certain forestry expenditure. The main purpose of section DP 11 of the Income Tax Act 2007 is to allow a deduction for certain forestry expenditure that might not otherwise be deductible.

A vendor is entitled to deduct the ‘cost of timber’ from the proceeds realised from the sale of such timber. The cost of timber includes the purchase price of the timber where it is purchased as standing timber, or the acquisition cost of a right to take timber.

For more information and advice, consult your tax or accounting adviser.

Crop Trees2017-07-07T08:41:09+12:00

Trees left standing following a thinning operation.

De minimis2018-10-04T08:47:31+13:00

When a forestry investor sells shares in an Ordinary Partnership or Limited Partnership, section HG 5 of the Income Tax Act 2007 taxes the sale proceeds from the treecrop, but allows a $50,000 safe harbour threshold per partnership in any 12-month period under which this taxation treatment does not apply. The $50,000 safe harbour is called the ‘de minimis’.

Deed of Assignment and Power of Attorney2017-07-07T08:42:38+12:00

The name of the document approved by the General Partner under which the Assignor (e.g. seller) transfers to the Assignee (e.g. buyer) ownership in the Assignor’s Limited Partnership shares. A limited Power of Attorney is granted to Trustee Executors Limited (the Supervisor) by the limited partners for administrative or procedural matters in maintaining the Limited Partnerships.

Deed of Partnership2017-07-07T08:43:15+12:00

Applies to an historic investment structure used by Forest Enterprises, the ordinary partnership. The name of the governing document setting out the terms and conditions of the operation of a partnership to which an investor is a party.

Deed of Scheme Management2017-07-07T08:43:47+12:00

Following the registration under the Financial Markets Conduct Act 2013 of our 49 public issue Managed Investment Schemes, the Deed of Scheme Management is now the pre-eminent governing document in respect of these investments, and incorporates all the elements required under the Act.

Diameter Breast Height (DBH)2017-07-07T08:44:07+12:00

Diameter Breast Height is used to describe a tree diameter taken at a standard height of 1.4 metres above ground level.

Direct Forestry Investment2017-07-25T15:20:44+12:00

Investing in forestry by directly owning trees and land. Direct forestry investments normally focus on one block of land, and comprise a group of investors who collectively own the land and trees according to their shareholding. A crop of trees is planted, tended and eventually harvested from the block of land by a manager on the investors’ behalf.

Direct Debit2017-07-07T08:44:34+12:00

A direct debit is an electronic means of paying bills from a bank account when they fall due, such as for paying Calls. An investor authorises Forest Enterprises to automatically withdraw from their nominated account the exact amount owing, as a convenient way to meet payment deadlines and avoid fees for paying by cheque or credit card.


The cash return to Investors from the net proceeds of harvest revenue. Payment of distributions is likely to be made up to four times per year once cashflow from harvest has commenced, harvest expenses have been paid, and when surplus funds are available.

Not all harvest income (distributions) is paid in the same year as the taxable income. See also “Why is there a difference between my taxable income and the distributions I’ve been paid?”


The largest trees in a stand.


If a species is endemic to a particular area, that means it is specific to that area and not found naturally elsewhere.


The planting phase of a forest, all the physical operations needed to bring a treecrop into being, including the purchase of land.

ETS Carbon Lease2017-07-07T08:45:59+12:00

See Carbon Lease.

Final Crop2017-07-07T08:46:07+12:00

Trees retained until the final felling of a stand.

Financial Report2021-06-14T10:17:25+12:00

A comprehensive report on each forest Limited Partnership activities and financial performance (financial statements) from the preceding financial year. Year end balance dates are either 31 December or 31 March. The Financial Report, together with the Annual Report, is sent to shareholders within four months of the balance date and after the independent financial audit process.

The latest Financial Report for a Forest Enterprises’ registered Managed Investment Scheme can be read and downloaded from the Companies Office Disclose Register (select ‘Search for a scheme’ and type the forest name in the search box).

See also Annual Report.

Forest Growers Levy2018-07-31T13:33:07+12:00

A levy applied to all harvested wood products (logs) and payable to the Forest Growers Levy Trust as per the Commodity Levies Act (2013). It is deducted at harvest.

For further information on this levy visit the Forest Growers Levy Trust website.

Forest Management Plan2019-10-22T15:14:25+13:00

The Plan sets out the activities for the establishment, management and harvest of the Radiata pine forest, the primary asset of Forest Enterprises’ investments, and is carried out by Forest Enterprises as Forest Manager.

Forestry Right2019-10-22T15:14:25+13:00

A right granted by the owner of land to someone else to establish and/or maintain and harvest a forest. Forestry Rights are commonly registered against the titles to the relevant land under the Forestry Rights Registration Act 1983.

General Partner2019-10-22T15:14:27+13:00

Under the Limited Partnerships Act 2008, the General Partner (GP) is the person is responsible for the day-to-day management of the Limited Partnership and its business. This management responsibility has been contracted out by the GP to Forest Enterprises Limited as the Investment Manager. However, limited partners retain control by holding shares in the General Partner and voting on resolutions as GP shareholders on key decisions affecting the investment.

Genetic Improvement/Genetically Improved2017-07-07T08:46:32+12:00

Improving the growth performance, wood quality and other aspects of trees through breeding.

Genetic Modification/Engineering2017-07-07T08:46:39+12:00

Changing the qualities of a particular species (plant or animal) by manipulating and changing the genetic structure of that species (e.g. by adding genetic material from another species). Forest Enterprises has no genetically modified trees. Ongoing research in this field is being undertaken by New Zealand’s forest research organisation, SCION but there are currently no plans to deploy genetically engineered trees into New Zealand’s plantation forest estate.

GF / Growth and Form2018-10-04T08:45:08+13:00

GF stands for Growth and Form and is a rating system used to compare treestocks (genetics). In general, the higher the GF rating, the higher the assessed projected performance in terms of growth and form of the resulting trees.

Governing Documents2018-07-31T13:38:58+12:00

The Governing Documents are the deeds, agreements or instruments that constitute or govern Forest Enterprises’ Managed Investment Schemes for the purposes of the Financial Markets Conduct Act 2013. These are available to read and download from the Scheme Register at www.companiesoffice.govt.nz/disclose by searching under ‘Search Schemes’.


A measurement of land area equal to 10,000 square metres.

Indigenous (Native) Forest2017-07-07T08:47:11+12:00

A forest that occurs naturally, containing a diversity of native and endemic tree species which seed, grow, mature and die within the natural cycle. Indigenous (native) forests contrast with plantation forests that are planted as a crop.

Indirect Forestry Investment2017-07-25T15:19:23+12:00

Investing in forestry directly by purchasing shares in a listed forestry company which owns a number of forests. See also Direct Forestry Investment. 

Initial Cost2019-10-22T15:14:29+13:00

The amount investors initially pay to buy shares in an investment. (There are also regular, on-going, instalment payments called Calls). Generally, a fixed initial cost applies for new issue investments, while an indicative initial offer applies to established Forest Enterprises investments available by open tender.

Indicative Initial Offer2019-10-22T15:14:29+13:00

A price range (e.g. $16,500 to $18,000), which is provided as an indication of the ‘current value’ of a Forest Enterprises established forest investment shares for sale by open tender. The actual initial cost will be the agreed purchase price.

Internal Rate of Return (IRR)2019-10-22T15:14:25+13:00

A metric used in capital budgeting to estimate the profitability of potential investments. IRR on a forest investment is the rate of return that makes the net present value of all cashflows (both positive and negative) from a particular investment equal to zero. It can also be defined as the discount rate at which the present value of all future cashflow is equal to the initial investment or, in other words, the rate at which an investment breaks even.

Investment Report2019-10-22T15:14:29+13:00

The name of the document produced by Forest Enterprises containing comprehensive information on previously issued established forest investments currently for sale by open tender.

Investment Statement2017-07-07T08:47:58+12:00

See Product Disclosure Statement.

Investment Unit2017-07-07T08:48:05+12:00

The name given to an investment parcel in a Forest Enterprises’ forestry investment. Typically each investment unit comprises 200 shares in a Limited Partnership. Investors can purchase more or less shares in the same or different forests.

JAS – Japanese Agricultural Standard2021-05-24T14:20:56+12:00

The Japanese Agricultural Standard (JAS) cubic metre is a global industry standard measurement of log volume. JAS is a measure of useable log volume rather than weight.  It is an attempt to measure the volume of the log available to the saw miller, involving special methodologies of assessing log diameter and length.

Export log grades are typically measured and sold in JAS m3. Payments to most contractors are made based on weight, which is appropriate for handling heavy material. This means the return to the forest owner is affected strongly by the conversion of weight to volume in the logs.

Conversion has seasonal trends and varies between log grades, length and log quality. Accounting for conversion is necessary to report comparable values from different sales options. Our convention is to report all prices converted to the ‘per tonne basis’, which would appear different if compared with a per cubic metre (JAS) series. Hence why our harvest reports show monthly JAS-to-tonne conversion per forest.

Landing / Skid site2017-07-07T09:07:35+12:00

Areas within a forest where harvested logs are processed and loaded onto trucks for transport to a port or mill.


LiDAR, or light detection and ranging, is a relatively new remote sensing survey method, using a pulsed laser to calculate an object’s variable distances from the earth surface.  LiDAR can be used to complement ground-based tree crop inventory and reduce the overall cost of obtaining area and crop condition data and information.

Limited Partnership2020-09-09T14:54:41+12:00

The investment structure for most Forest Enterprises’ investments is a Limited Partnership (LP), comprising multiple Limited Partners who are the investors, along with one General Partner (GP).

Read this helpful guide on Limited Partnerships from law firm DLA Piper New Zealand.

Limited Partnership Agreement2016-05-25T11:41:26+12:00

A Limited Partnership must have a written partnership agreement which sets out the matters agreed between the parties in respect of the operation of the Limited Partnership and the conduct of its business.


Cubic metres of timber per hectare.

Mid Rotation Inventory2017-07-07T08:56:40+12:00

An inventory of the trees halfway through a crop’s life cycle, involving the measurement and analysis of a randomly selected sample based on area, often at an intensity of 1% of total area.

The data is used to ‘grow on’ the crop to maturity using computer modelling to give an estimate of log grade and yield to assist with harvest planning and timeframes, and also forest valuation.

Net Stocked Area2018-07-30T13:16:04+12:00

The actual area of land in the forest that has the treecrop on it.

Net Present Value (NPV)2017-07-07T08:57:05+12:00

Net Present Value is the sum of all discounted future cash flows for a forest investment. NPV is a useful tool to determine whether an investment will result in a net profit or a loss.

New Issue2017-07-21T12:17:36+12:00

A new forest investment offered for direct investment under a Product Disclosure Statement.

See Product Disclosure Statement.

Open Tender2019-10-22T15:14:29+13:00

The process to invest in an established Forest Enterprises forest investment is to purchase shares via open tender, a process that Forest Enterprises facilitates on behalf of our existing clients. Potential buyers submit an offer to buy shares, which is either accepted by the seller or an agreeable offer is negotiated.

Ordinary Partnership2019-10-22T15:14:28+13:00

This is an investment structure used by some of Forest Enterprises’ historic forest investments. An ordinary partnership is the relationship between persons carrying on a business in common with a view to profit. Unlike a company, an ordinary partnership is not a separate legal entity. Partners in an ordinary partnership therefore have unlimited personal liability as between themselves and third parties.

Partnership Agreement2017-07-07T08:57:32+12:00

See Deed of Partnership.

Partnership Shares2017-07-07T08:57:40+12:00

The name of the unit of investment in a partnership.

Pinus radiata2017-07-07T08:57:47+12:00

See Radiata pine.

Plantation Forest2017-07-07T08:57:54+12:00

A forest that has been planted as a crop for eventual harvest. Most plantation forests are replanted following harvest for second and subsequent rotations in perpetuity. The majority of New Zealand plantation forests are planted in Radiata pine (Pinus radiata), an exotic tree species. Plantation forests contrast with indigenous or naturally occurring forests.

Plots / Plotting2017-07-07T08:58:00+12:00

A plot is a selected sample of trees within an area. A plot is used during forestry operations (e.g. pruning and thinning) for quality control, or at other times for measuring growth and yield characteristics for record-keeping and projection purposes.

Plotting is the process of statistically selecting the number and location of plots to get a representative sample.

Pre-Emptive Rights2017-07-07T08:58:07+12:00

A feature of an ordinary partnership investment, one of our historic investment structures. Under pre-emptive rights provisions (set out in the Deed of Partnership), should one member wish to sell their ordinary partnership share(s), they must first be offered to the other partners and only when these partners have declined to purchase at the seller’s nominated price can the investment then be offered to non-partners at this same price.

Product Disclosure Statement (PDS)2020-09-09T14:51:48+12:00

The name of the registered disclosure document produced by Forest Enterprises for prospective investors as required under New Zealand’s Financial Markets Conduct Act 2013 for new issue investments. The Product Disclosure Statement replaces the Prospectus and the Investment Statement that were previously required under the Securities Act 1978.

Visit the FMA website here for a helpful guide to Product Disclosure Statements.

Projected Return2017-07-07T08:58:23+12:00

This is a calculation of the harvest returns using the current average log prices over the last 12 quarters (3 years) used by Forest Enterprises. The projected return is indicative only and can vary up or down, depending on actual rates of tree growth and associated timings of pruning and thinning, changes in stocked area, costs, tax rates and any unforeseen events.


See Product Disclosure Statement.


Removal of branches flush with the trunk to promote the growth of knot-free timber. There are 1 – 4 prunes (sometimes called ‘lifts’) that usually occur between 4 and 8 years after planting.

Radiata pine (Pinus radiata)2017-07-07T08:59:17+12:00

A fast-growing soft-wood tree that grows up to 35 metres and has many commercial uses. It is the most commonly grown tree in New Zealand’s plantation forests. It is also known as Monterey pine and is native to California, USA.


Removing competing growth from around young trees, normally by spraying. 


The period of time from when a forest is planted to when it is harvested. 

The first rotation refers to the first period that a treecrop has been grown on a particular area of land.

The second rotation refers to the second period that a treecrop has been grown on a particular area of land. Second rotation pine plantations have a range of superior qualities to the first rotation.


Generic term for harvested logs or trees with round form, often referring to smaller logs.  


A log suitable for manufacturing sawn timber. 

Secondary Market2019-10-22T15:14:25+13:00

This is the market Forest Enterprises operates to facilitate the sale and purchase of established Forest Enterprises forestry investments on behalf of existing clients.


The process of removing carbon dioxide from the atmosphere, thereby reducing the total concentration in the atmosphere. Living trees sequester carbon through photosynthesis. Carbon can be stored in biomass such as trunks, branches, leaves, and roots.


The name of the unit of investment in a company formed under the Companies Act 1993, in a Limited Partnership formed under the Limited Partnerships Act 2008, or in an Ordinary Partnership formed under the Partnership Act 1908.


Establishing, growing and tending forest crops. 


An area of trees with homogeneous yield.

Statement of Investment Policy and Objectives (SIPO)2018-07-31T14:05:06+12:00

A statement of investment policy and objectives (SIPO) is a document that sets out the investment governance and management framework, philosophy, strategies and objectives of a Managed Investment Scheme (MIS) and its investment funds or portfolios.

Under the Financial Markets Conduct Act 2013, all Managers must ensure there is a SIPO for each MIS they manage. Forest Enterprises SIPOs are publicly available from the Disclose Register on the Companies Office website, www.companiesoffice.govt.nz/disclose.


The number of trees normally expressed as ‘stems per hectare’ i.e. the number of trees per hectare.


Number of standing live stems per hectare.


The net payment to investors for a stand of trees. Normally expressed as $/hectare.


In relation to this Managed Investment Scheme, the Supervisor is appointed to look after Investors’ interests under the Scheme, per the Financial Markets Conduct Act 2013 (FMC Act). The Supervisor acts on behalf of the Investors to supervise the performance of the Manager and ensure it complies with its obligations under the FMC Act and the Governing Documents.

Supervisors must be registered and are covered by the Financial Markets Supervisors Act 2011.

The Supervisor of Forest Enterprises’ Managed Investment Schemes is Trustees Executors Limited (FSP37383).


See Open Tender.


The collective term for the various tasks (such as pruning) to improve tree form and wood quality, during the period between when a forest crop is established and the first thinning.


Removing trees within a stand to promote growth from the remaining crop.


The leaning over of young trees within a socket of soft ground following strong wind events associated with heavy rain.


The The Land and Treecrop on the Land are the primary assets of a Forest Enterprises Investment. The treecrop is the crop of Radiata pine trees growing on the Investment’s land that are being managed to harvest.


See Investment Unit.


When trees are pushed over or uprooted by wind.


Wood consists of cellulose (40-45%) and hemicellulose (15-30%), which are both carbohydrates. Wood also contains up to 30% of complex high molecular weight poly-phenolic chemicals, including lignin. Lignin is an important component that gives wood its rigidity (and consequently allows plants made from wood reach a large size) and much of its durability.


The amount of wood recovered from an area of land in the forest, usually expressed as cubic metres per hectare (m3/ha).

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