The shared forest group acquires forest land in the south-west region of the Massif Central. This is because overall prices for forest land are far below the market average of surrounding countries in Western Europe. For instance, a hectare costs anywhere from 3.000 € to 10.000€ in France, whereas in Bavaria, the price range floats between 10.000€ to 20.000€ per hectare.
To optimize the investment, the group buys forest land covering at least 10ha. This is done to decrease risks linked to both the market and the environment, thanks to the broader variety of wood types on such parcels. The same goes for labour, as woodsmen will come from different employment regions.
The plots in which the group invests are at least 30 years old, in order to guarantee direct return on investment, and generate profit immediately. This enables the forest group’s management to have a stronger positive impact on the lot, as selected thinning is implemented. The long term goal is to build the group’s land capital to between 1.000 and 2.000 ha.
Partners in this particular shared forest group are exclusively individuals wishing to secure their savings in a concrete, long term investment. This therefore excludes companies, banks, municipalities or associations. Each partner owns a certain number of shares according to their contribution towards the group’s capital.
Partners do not own a forest but rather a share of all the forests owned by the group. The group’s long term management aims to increase the size of the land owned while generating a steady 1% in dividends. Any eventual extra earnings will either go towards expanding the existing land capital, or towards more dividends for the associates, depending on what is decided at the yearly Partner’s general assembly.
In order to perpetuate the forest group, partners agree to keep their shares for at least 5 years following their investment as well as to not receive any dividends during this consolidation period.
Each year, partners can benefit from forest specific fiscal arrangements. In order to qualify for such advantages, they must hold on to their shares for at least 8 years. Since the forest evolves at a much slower rate than just 8 years, it is advised that the partners invest for the long term.
However, an emphasis is made on the partners’ freedom to access their investment, thus a strong treasury allows the share to be bought back if necessary.
Income in mostly generated by timber production and its sale: softwood lumber, firewood and precious woods. Thus, the group's managers handle property expertise, the purchase of forest parcels, the drafting and writing of legal documents as well as their approval, the marking of future cuts, the organisation and oversight of logging operations, and the final sale of the product.
Creating logging roads, plantations, clearing of said plantations, diversification of wood types, or any other necessary task is overseen or done by the managers (both being versatile forestry engineers).
The management method applied to the group's forests respects the following criteria:
- Fixed logging roads in order to maintain the ground's structure thus the forest's fertility and productivity.
- No clear cuts of more than a hectare during any step of the management process.
- No chemical products, pesticides, fertilizers, or any other substance that can cause harm to the ecosystems managed by the group (including groundwater).
- PEFC forestry label certification aiming to obtain FSC level certification.
- Further diversification of parcels in terms of wood types and structure to gradually transition towards inhomogeneous parcels.
- Systematically encourage natural regeneration of parcels, along with adequate regulation of wildlife on said parcels.
- Presence of enough dead wood, both standing and fallen, as an ecological factor to boost biodiversity, water-holding capacity, and natural fertilisation.
- Diversified wood types in order to spur the forests's biodiversity.
- Hunting is a source of additional income but the priority is the balance between forest and game.
- At least 5% of each forest's area left as a nature reserve in order to sustain the most biodiversity-rich ecosystems.
These various measures allow us to preserve and strengthen the ground's fertility, which is the forest's true capital, and therefore the group's true capital.
This will allow future generations to benefit from the preserved natural resources in order to allow the group's activities to continue in the best conditions possible, as well as to appreciate the healthy and functional ecoystem’s benefits.
The shared forest group is a non-trading company with a participatory structure. Each partner has a vote, proportionate to the number of shares he holds, that he can cast during the annual general assembly. Annually, at the general assembly, the managers present to the partners the review of the year's activities, the group's balance sheet, and various propositions for the upcoming year.
Designed to simplify and spur forest management, the shared forest group's structure is light and loose from a legal status perspective, meaning the group has a broad scope to set its powers and rules. It is the ideal legal structure to bring together different investors wishing to gain the financial weight sufficient to buy sizeable forest parcels.
A shared forest group is not a company so to speak, therefore, by statute, it is forbidden to trade or transform wood other than the wood it produces. A whole array of forestry specific aids, subventions, and tax exemptions is available to shared forest investment groups.
All of the shared forest investment group's shares belong to investors (private individuals). Resorting to bank loans is limited to the strict minimum and not favoured at all.
The bulk of the capital is invested into forest land, and the small remaining fraction goes towards making the group's activities run.
Financial input is primarily cash consideration with a minimum of 10 000 euros, and the reinvested earnings as well as these new inputs go towards the growth of the shared forest group. Contributions in kind can be considered and reviewed on a case by case basis, but they are not favoured.
The managers are stakeholders as associates to the shared forest group, having invested a portion of their savings in this venture.