Planting the idea of alternative investment

The Life: Alternative investing is becoming ever more popular. But what are the risks involved? Shelley Low, operations and marketing director at Plantation Capital, a company that has just set up in the UAE, explains.

For Shelley Low of Plantation Capital, the sweet scent of investment opportunities in oud led to the Middle East. Satish Kumar / The National

Plantation Capital, which is based in the UK and offers investment opportunities in hardwood, carbon-neutral agricultural crops and renewable energy projects, has just set up an office in the UAE. Here, Shelley Low, the operations and marketing director at Plantation Capital, talks about the risks of alternative investing and why the company chose to set up in Dubai.

Are alternative investments safer than shares?

They actually call it high risk because it's the unknown. Everybody knows about stocks. Because [alternative investing is] a niche market, it's uncertain. But if you do your research you will see it's more stable than many markets.

Does it make your job harder?

Of course, but we always encourage people to do their own due diligence. And once they have actually looked into it they realise that everything you have been saying is completely valid.

Why did you set up an office in Dubai?

Alternative investing was a massive boom in the UK and Europe [about three years ago] because everyone was going eco-friendly. And one of our products is oud [a key ingredient in Middle East perfumes], so the Middle East seemed to be the next place to enter.

How do you invest in oud?

You wouldn't be investing in the oud, per se. You would be purchasing agarwood trees of different quantities, depending on your investment amount. Then they will be planted in Asia. They will be maintained and looked after and they will grow. There is a certain process of inoculation that has to occur to stimulate the production of the resin. It's a natural product, so you can't really put a timeframe to it. But six to seven years is the average.

And you're locked in for that time?

That's the beauty about this. You can always resell it on to a third party if you want. It's quite liquid with regard to that.

What happens if there is a drought or a flood, or if a tree an investor purchases ends up dying?

We undertake risk assessments. We make sure that [the trees] are not in a floodplain and we operate in a tropical environment. We offer a warranty so if your tree dies we will replace it with one of the same age. If not, we will replace it with a sapling.

What kind of return does an investment with your company offer?

It depends on what product you invest in, but you are looking at a 12 per cent to 17 per cent return. But that's the joy of the alternative segment. The population is always growing, so there is always a demand.

Do you have any clients already in the Middle East?

We have a few. I won't say plenty. Our main market has been Europe. But of course that's where we have been based. So we hope in being based here and with all the publicity at the moment about ... the environment, people are looking for a type of investment where you can give back. You're not only profiting. You are really doing something good for the environment.

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