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Macquarie Forestry Investment 2009 (Late Growers)
Macquarie Forestry Investment 2009 (Late Growers)
Cash Rebate 8.25%
Closing Date CLOSED
Minimum Investment $9,200 (ex GST)
Term of Project 11.5 years
Research AAG 4 stars
Adviser Edge 4 stars
ATO Product Ruling 2009/48
 

Post 30 June Investors

Macquarie Forestry represents an innovative investment opportunity which can provide diversification in your portfolio; a key requirement for many investors in the current economic environment.

With the Macquarie Forestry Investment 2009 you can feel confident that you will be investing with an experienced and stable manager provides a long term commitment to managing your investment.

Investment overview

 The Macquarie Forestry Investment 2009 provides you with an opportunity to invest in Australian plantation forestry. Your forestry business will grow plantation trees with expert support at all stages of the process. Once fully grown, the trees will be harvested and the woodchips sold on your behalf.

The Macquarie Forestry Investment 2009 also offers you the opportunity to invest in the land on which your trees are grown. By investing in the land you can gain exposure to potentially appreciating rural land prices as well as potentially providing an additional source of income at maturity.

Additionally, unlike most other Forestry Managed Investment Schemes available to Australian investors, by investing in the land you will have the added security of ownership of both the trees and the land.

Key benefits of investing
 
• Diversification - agribusiness has historically exhibited low to negative correlation to traditional asset classes such as cash, fixed interest, property or shares and as such can help to provide diversification in your investment portfolio.
• Tax-effective1 – receive a potential 100% tax deduction for your investment in the trees, providing extra flexibility in cash flow, debt management and taxation planning. By investing in the trees, you have the option of either investing in the land in your own name, or that of your nominee. For example, a SMSF, Family Trust or spouse.
• Risk management – with the ability to invest in land as well as trees, you can manage your downside risk by having the potential for an additional source of income at maturity and exposure to the relative stability of an investment in land.

Why invest with Macquarie?
 
• Stability - Macquarie Agribusiness is part of the Macquarie Group - a large, diversified financial institution and provides a long term commitment to managing your investment. By investing in the Macquarie Forestry Investment 2009 you will receive the benefit of the comprehensive risk management of the Macquarie Group.
• Expert team - your investment will be managed by a team of experts from the day the trees are planted through to final harvest. Forestry managers, Midway and McEwens, who together have more than 30 years combined experience, will provide on-the-ground expertise throughout the term of your investment.
• Experience - Macquarie Agribusiness has operated forestry investments for retail investors annually since 2003 and has established and managed more than 17,700 hectares of forestry plantations during that time. As a group, Macquarie has serviced clients around the globe in the agricultural sector for more than 15 years. Macquarie now have approximately $1 billion in funds managed or committed across forestry, almonds, viticulture, dairy and pastoral businesses. Macquarie's team is 150 strong and manages more than 3 million hectares of land.

How the investment works

You can choose to invest in trees or land or both.

Investing in the Tree Project
For each Interest you will own a specific group of trees planted on 1/4 hectare of land.

Once fully grown, after a period of approximately 10 years, the trees will be harvested and processed and the woodchips sold on your behalf.

Investing in the Land Trust
You can invest in 1/4 hectare Units of land (with a minimum investment of one hectare). You have the potential to receive annual cash distributions from your investment in the Land Trust.2

You will receive any net proceeds3 from the sale of your land once the trees have been harvested, in addition to a share of the harvest.

Pre-sale of your trees

You have the comfort of knowing that before your trees have even been planted, agreements have been signed for the purchase of your trees, once harvested, by Midway - one of Australia's largest exporters of pulpwood.

Who may be interested in this investment?

This investment may be suitable for you for a number of reasons, including if you:
 
• are looking for portfolio diversification;
• would like potential for growth;
• are looking for a potentially tax efficient investment4;
• have a self managed super fund and are looking for potentially tax efficient investment solution.

Why invest in plantation forestry?
 
• Growing demand - there has been strong growth in world demand for paper and paperboard in recent years. Continued growing demand is expected to have a positive impact on the price at which your woodchips are sold.
• Australia’s competitive advantage - Australia’s proximity to the Asia-Pacific region provides a significant competitive cost advantage due to lower shipping costs. Demand from China and Indonesia has been growing rapidly in recent years as traditional supply is constrained by native forest availability. China is evolving from being a major exporter of hardwood pulpwood to becoming a net importer, with a growing deficit expected during this current decade.
• Sustainable development - plantation-based forestry provides a replacement for the native forest sourced wood previously used to satisfy demand for wood and paper products.

Managing the risks of investing in agriculture
The Macquarie Forestry Investment 2009 offers you the opportunity to invest in trees and the land that the trees are grown on. The ability to gain exposure to two different sources of returns has the potential to diversify your risk of investing while maximising returns.

Investors may benefit from capital growth by investing in land as well as trees. Surveys by expert land valuers show an average increase in land of 4.7%–6.7% p.a. since 1981 as shown in the chart below.

Land value growth


Source: C.J. Ham & Murray Summary Appraisal Report October 2008. Summary of land values from the period 1981 to 2007.

The Macquarie Forestry Investment 2009 — at a glance
 
  The Tree Project The Land Trust
Minimum Investment $9,200 (excluding GST) for one hectare of trees.
You may then invest in increments of 1/4 hectares.		 $2,000 for units providing interest in one hectare of land.
You may then invest in increments of 1/4 hectares.
Investment Term Approximately 11.5 years. Approximately 11.5 years.
Potential Returns Returns derived from the sale of woodchips produced at harvest. Annual rental income and capital growth returns derived from one hectare of rural land following sale at maturity.
Fees and Expenses No ongoing fees payable prior to the harvest of the trees.5 No ongoing fees payable (other than from reinvestment of income).6
Tax Treatment Potential 100% tax deduction for the application price.7 Any capital gain on the land may be taxed at concessional CGT rates.8
Investors will be required to pay tax on the Trust income earned from any annual lease payments9

Financing options

You have the option to borrow up to 100% of your application amount (subject to approval) with the potential to receive a tax deduction for your interest payments.

Indicative interest rates and payment options are outlined below. Please see the PDS for more details.
 
Term Repayment Type Indicative interest rate10
1 year Principal only 0%
5 years Principal and interest 10.25% p.a.
7 years Principal and interest 10.45% p.a.

Making an application

Before you invest in the Macquarie Forestry Investment 2009, it is important that you read and understand the terms and investment risks set out in the PDS. To apply, simply complete the application form attached to the PDS and send it directly to Macquarie. You should consult your financial, legal and taxation adviser for personalised recommendations and advice.

Risks

As with any investment there are risks to be considered, and as this is a long term agricultural investment, many variables may affect the performance of the investment. As well as general investment risks, risks specific to the land and trees include agriculture and environmental risks as well as risks associated with the price of the trees at maturity. Investors should read Section 6 “Investment Risks” of the PDS when available.

Past performance is not indicative of future performance.

1 ATO Product Ruling PR 2009/48 ("the Product Ruling") has been issued to confirm the tax treatment for eligible investors who invest in the Macquarie Eucalypt Project 2009 ARSN 135 454 616 ("Tree Project") on or before 31 December 2009. You should note that the Product Ruling will only apply to investors who insure their trees. The Product Ruling is only a ruling on the application of taxation law and is in no way expressly or impliedly a guarantee or endorsement of the commercial viability of an investment in the Tree Project or the soundness or otherwise of the Tree Project as an investment, or the reasonableness or commerciality of any fees charged in connection with the Tree Project. The Product Ruling is only binding on the Commissioner if the Tree Project is implemented in the specific manner provided in the Product Ruling and the circumstances of investors are as set out in the Product Ruling. See Section 8 ‘Tax Treatment’ of the PDS for details. The Product Ruling does not rule on the tax consequences of investing in the Macquarie Timber Land Trust 2009 ARSN 135 454 563 ("Land Trust"). You can view a copy of the Product Ruling above.

2 Depending on your marginal tax rate and the level of distribution that is reinvested back into the Land Trust.

3 When the land is sold, proceeds of the sale will firstly be used to extinguish any residual balance outstanding on the Land Trust Loan, with the remaining net proceeds on sale of the land to be distributed to investors.

4 ATO Product Ruling PR 2009/48 ("the Product Ruling") has been issued to confirm the tax treatment for eligible investors who invest in the Macquarie Eucalypt Project 2009 ARSN 135 454 616 ("Tree Project") on or before 31 December 2009. You should note that the Product Ruling will only apply to investors who insure their trees. The Product Ruling is only a ruling on the application of taxation law and is in no way expressly or impliedly a guarantee or endorsement of the commercial viability of an investment in the Tree Project or the soundness or otherwise of the Tree Project as an investment, or the reasonableness or commerciality of any fees charged in connection with the Tree Project. The Product Ruling is only binding on the Commissioner if the Tree Project is implemented in the specific manner provided in the Product Ruling and the circumstances of investors are as set out in the Product Ruling. See Section 8 ‘Tax Treatment’ of the PDS for details. The Product Ruling does not rule on the tax consequences of investing in the Macquarie Timber Land Trust 2009 ARSN 135 454 563 ("Land Trust"). You can view a copy of the Product Ruling above.

5 Insurance is required if you take a loan out with Macquarie with a term of more than one year or if you wish to rely on the Product Ruling.

6 Until the application price is applied toward the purchase of the land, it will be placed in an interest bearing deposit account and all interest paid to the responsible entity of the land trust as a fee.

7 ATO Product Ruling PR 2009/48 ("the Product Ruling") has been issued to confirm the tax treatment for eligible investors who invest in the Macquarie Eucalypt Project 2009 ARSN 135 454 616 ("Tree Project") on or before 31 December 2009. You should note that the Product Ruling will only apply to investors who insure their trees. The Product Ruling is only a ruling on the application of taxation law and is in no way expressly or impliedly a guarantee or endorsement of the commercial viability of an investment in the Tree Project or the soundness or otherwise of the Tree Project as an investment, or the reasonableness or commerciality of any fees charged in connection with the Tree Project. The Product Ruling is only binding on the Commissioner if the Tree Project is implemented in the specific manner provided in the Product Ruling and the circumstances of investors are as described in the Product Ruling. See Section 8 ‘Tax Treatment’ of the PDS for details. The Product Ruling does not rule on the tax consequences of investing in the Macquarie Timber Land Trust 2009 ARSN 135 454 563 ("Land Trust"). You can view a copy of the Product Ruling above.

8 Provided the conditions for the CGT concession are satisfied. This will depend on each investor’s specific circumstances. We recommend you seek advice from your taxation adviser.

9 In return for the right to use the land, MAAML will pay the Land Trust annual rental payments which may give rise to a receipt of taxable income for Land Trust investors. We
recommend you seek advice from your taxation adviser.

10 These interest rates are indicative only. The actual interest rate applied to an Investment Loan will be the rate indicated at www.macquarie.com.au/forestry on the date which your loan is approved.

IMPORTANT INFORMATION: This information has been prepared by Macquarie Alternative Assets Management Limited ABN 30 103 237 181, AFSL 225758, (MAAML) and Macquarie Financial Products Management Limited ABN 38 095 135 694, AFSL 237847, (MFPML) and is current as at March 2009.
An invitation to apply for interests in the Macquarie Eucalypt Project 2009 ARSN 135 454 616 (Tree Project) will be made by MAAML and an invitation to apply for units in the Macquarie Timber Land Trust 2009 ARSN 135 454 563 (Land Trust) will be made by MFPML (together the Macquarie Forestry Investment 2009) in the Product Disclosure Statement to be dated on or around 20 March 2009 (PDS). The PDS will be available from here soon. In deciding whether to acquire or continue to hold an investment in the Macquarie Forestry Investment 2009, an investor should obtain the PDS and consider its contents. This information has been prepared by MAAML in relation to the Tree Project and MFPML in relation to the Land Trust and is general information only. It does not take account of your objectives, financial situation or needs. Before acting on this general information, you should therefore consider the appropriateness of the information having regard to your personal circumstances. Macquarie recommend you obtain financial, legal and taxation advice before making any financial investment decision.

The Macquarie group does not give, nor does it purport to give, any taxation advice. The taxation discussion in this document is based on laws current at the time of writing. Those laws may change. The application of taxation laws to each investor depends on that investor’s individual circumstances. Accordingly, investors should seek independent professional advice on taxation implications before making any investment decisions.

MAAML, MFPML or its associates, officers or employees may have interests in the financial products referred to in this information by acting in various roles including as investment adviser, broker or lender. MAAML, MFPML or its associates may receive fees, brokerage or commissions for acting in these capacities. In addition, MAAML, MFPML or its associates, officers or employees may buy or sell the financial products as principal or agent. You may contact MAAML or MFPML on 1800 617 900.

Investments in the Macquarie Forestry Investment 2009 are not deposits with, or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 or of any other Macquarie Group Company, and are subject to investment risk, including possible delays in repayment and loss of principal or income invested. None of Macquarie Bank Limited nor other member company of the Macquarie Group guarantees any particular rate of return, the performance of, or the repayment of capital from the Macquarie Forestry Investment 2009.
Simply download an Investment Brochure/PDS above. It’s that easy!
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