Strategy
Strategy Management
Every acquisition begins with a parcel-specific investment plan before any capital is committed.
A Business Plan for Every Parcel
Each forest or agricultural property is evaluated on its own merits. Before acquisition, we prepare a dedicated investment and exit plan that defines the target buyer, expected sale price, anticipated holding period, and projected costs—including clearing, development, harvesting, registration, and other transaction expenses.
Rather than relying on portfolio-level assumptions or average market performance, each parcel must independently meet our return criteria. This disciplined approach allows us to reject opportunities that do not satisfy our investment requirements, even when broader market conditions appear attractive.
Forest Land Strategy: Secure the Timber Sale Before Acquiring Harvesting Rights
For forest acquisitions, we identify the buyer and establish a market-based price for the standing timber before committing to purchase the harvesting (felling) rights. By validating the exit strategy in advance, we substantially reduce execution risk and avoid relying on uncertain future timber market conditions.
As a result, every transaction is effectively underwritten twice: first against the acquisition price of the land, and second against a confirmed, current market valuation for the timber. Capital is deployed only after both components support the expected investment return.
Agricultural Land Strategy: Buy Underutilized, Sell Development-Ready
Our agricultural land strategy focuses on creating value through targeted land improvement rather than market appreciation alone.
Acquisition. We acquire overgrown, bush-covered, or underutilized agricultural land at prices below prevailing market value, typically from owners who lack the capital, expertise, or intention to restore the land to productive agricultural use.
Development. Following acquisition, we enhance the property’s value by clearing scrub and scattered timber, removing stumps and root systems, and, where commercially beneficial, consolidating adjoining parcels into larger, contiguous farm-ready holdings.
Disposal. We market the improved properties to buyers who place a premium on operational scale and immediate usability, including ALTUM-supported Latvian agricultural enterprises and Nordic institutional farmland investors. The objective is to realize a sale price that reflects the land’s enhanced, development-ready condition.
Due Diligence and Registration
Every acquisition follows a standardized due diligence and registration process before entering the portfolio and again prior to disposal.
- Independent valuation reports are reviewed for both forest and agricultural properties before any acquisition decision is made.
- Following completion of the purchase, legal ownership is transferred to SIA SILVALAND.
- Ownership is registered with Zemesgrāmata, Latvia’s official Land Register, providing a legally verifiable, government-maintained chain of title for every asset held within the portfolio.
- Before disposal, title, cadastral records, and all relevant documentation are reviewed to ensure the property is fully transferable and ready for sale.
This disciplined process ensures that every investment is supported by independent valuation, clear legal ownership, and a transparent, verifiable title history, reducing operational and legal risk throughout the investment lifecycle.
Risk management principles
Portfolio Risk Management
Our investment process is designed to reduce concentration risk while maintaining flexibility throughout the investment cycle.
- Diversification. Capital is allocated across multiple parcels, geographic regions, and land categories—including both forest and agricultural assets—rather than concentrated in a small number of large acquisitions. This reduces exposure to individual property, operational, and local market risks.
- Live Market Pricing. Every acquisition is underwritten using current market evidence, including pricing data from Cenu Banka and the Latio Land Price Index, rather than historical asking prices. Investment models are updated as market conditions change, ensuring acquisition decisions reflect prevailing values.
- Liquidity Discipline. Approximately 80% of invested capital is allocated to liquid, income-generating forestry assets, including forest harvesting rights and timber resale transactions. This structure enables a significant portion of the portfolio to be converted into cash within a normal operating cycle while continuing to generate operating income.
- Title Certainty. Capital is considered deployed only after legal ownership has transferred and registration has been completed. Likewise, a transaction is treated as exited only after ownership has been legally transferred to the purchaser and all registration requirements have been satisfied.
Why Parcel-Level Planning Matters
Land assets differ significantly in quality, timber composition, agricultural potential, location, infrastructure, and buyer demand. Applying a single portfolio-wide investment model would require averaging these differences, reducing pricing accuracy and potentially masking unattractive opportunities.
Instead, every acquisition is evaluated independently, with its own investment thesis, development plan, expected costs, target buyer, projected exit price, and anticipated holding period. Only parcels that satisfy our required return thresholds on a standalone basis are acquired.
This parcel-level underwriting approach creates a portfolio composed of individually validated investments rather than one that depends on portfolio averages to achieve its target returns.