Carbon credit investment with IRE (Industry RE)…a fascinating scam…???

 

 

 

 

 

Happy New Year! In this first post of the year you will read about a hot investment topic – carbon credits! I must admit that this kind of investment is difficult to explain so I believe the best thing for you is to google it on Wikipedia.com for a short introduction. After reading wikipedia you would probably realize that this kind of investment is difficult to get a grip on and there is a lot of information out there, and many different investment schemes. I chose to go with the English investment broker Emerald Knight Consultants, who is “specialising in Socially Responsible & Sustainable Investments”. At the time, Emerald Knight Consultants was promoting a carbon credit investment from a company called Industry RE (www.industryRE.com) which had the mission “To aid in the creation of a profitable and sustainable future where our ecosystems, population, businesses and financial systems work together in harmony”.

 

 

 

              

 

Industry RE defined a carbon credit as a “unit earned by someone who has implemented a project according to international standards that generates a reduction, removal, storage or avoidance in greenhouse gas emissions than would otherwise have occurred (for example a windfarm)”. In this case I bought Voluntary Emission Reduction Carbon Credits (VERs). According to Wikipedia.com, VERs are usually created by projects which have been verified outside of the Kyoto Protocol. One VER is equivalent to 1 tonne of CO2e emissions. Through these schemes, industries and individuals voluntarily compensate for their emissions or provide an additional contribution to mitigating climate change. VERs may be developed and calculated in compliance with one of several VER standards. These standards set rules defining how emission reductions are measured. Standards provide assurance for buyers of VERs. At a minimum, all VERs should be verified by an independent third party.

 

The opportunity was to buy VERs over one year and receive 30% ROI. It sounded great! The account manager at Emerald Knight Consultants said over the phone “the returns from the last batch is being paid out as we speak”. A “proven” investment, even better! So I bought for the smallest amount possible as I didn’t know much about this type of investment and I wanted to be a bit cautious.

 

So what happened with this high-return investment?

 

After one year of eager waiting I got the information that the payout of my initial investment and the 30% profit was delayed. I waited one month…. two months… three months… And I received one excuse after the other for the delay: Industry RE had moved its headquarters to Dubai so the bank transfer didn’t work properly, the bank had been overtaken by another bank so no transfers worked, etc. It was impossible to get a hold of Industry RE and Emerald Knights Consultants were not helpful either. I felt a bit like I was David fighting Goliath. J

 

 

 

 

 

 

 

 

 

One day I happened upon a link on the Internet that referred to a group of over 200 Industry RE investors that were in the same situation as me – delayed returns with elusive excuses. The idea behind the group was that “many investors are together stronger than one single investor”, that we could share information received about the investment, and apply pressure on Industry RE and Emerald Knights Consultants to deliver according to contract. A while ago all investors received a letter that many of us had anticipated – Industry RE was bankrupt. Where the money went is still a mystery, and the CEO seems to have disappeared into thin air. There are many theories circulating within the group of investors about what has happened, but one thing is clear: Industry RE is in liquidation and has been taken over by liquidators. There is basically a snowball’s chance in hell that I will get some of my invested money back. Thank you Industry RE, well done. And special thanks to Emerald Knights Consultants for a high-quality Due Diligence. Aaaaaaaaaaaaaarrrrrrrrrrrrrrgggggggghhhhhh!!!!

 

Many in the investors group have also invested in GFI Forestry through Emerald Knight Consultants, which also is experiencing delayed returns which were expected in January 2013…. Hopefully we will have more luck chasing this payment.

 

 

 

 

 

 

 

 

 

 

 

Here is to hoping that you, valued reader, will have more prosperous investments during the new year than I had in 2013!

 

I hope also to post some more profitable (?) investments that I have conducted recently. So stay tuned and subscribe to my blog if you haven’t already done so!

 

Until then, invest safely J

/Chris

 

 

  

Teak investment Belem Sky in Brazil with Emerald Knight Consultants and Global Forestry Investments (GFI)

 

 

 

 

 

 

 

 

Brazil is a popular country for alternative investments. It has a politically stable environment and a fairly strong and growing economy. It is one of the top ten largest economies in the world, and one of the famous BRIC-countries with a relatively high GDP-growth.

This investment (which I made in year 2012) is in a teak plantation in Brazil. The investment broker I used was Emerald Knight Consultants, a British company specializing in providing sustainable and ethical investments with high returns. The company is only marketing investment products and the contract is signed directly with the product provider. In this case, the product provider is Global Forestry Investments (GFI), a timberland investment company focusing on sustainable forestry investments. GFI also has a long term goal to help the local community in Brazil by working together with the local government and plans to build a school for the locals. GFI has offices in Brazil, UK and Dubai.

The teak plantation is located in Belem, in the region Para north east of Brazil, and the investment project is named Belem Sky plantation. I have purchased 0.1 hectares where around 100 trees are grown, managed by GFI with partners during the investment period. The trees are already eight years old and the plan is to do the final harvest in 15-18 years. There is an option to resell the trees after three years to GFI with a capital uplift of five percent. During the investment period there will be thinning of trees (selective removing trees to improve growth rate of remaining trees) around four times, which will provide extra dividends the year after the thinning since the removed trees can be sold. The expected average return is 10% per year over the investment period.
 

 

The figure above shows the Belem area by Google maps, marked with an “A”

A few years ago I invested in another teak project, in Panama. So why do another one? Well, there are two main reasons. Firstly, if I invested in this teak project through Emerald Knights, I would get access to another more lucrative investment (more about this investment in a later blog posting). Secondly, timber has historically been a very safe investment class with good returns. The teak price has increased steadily over the past 20 years and has a broad usage within both industry and private consumer industry. Also, teak is resistant against fungus, insects, fire and challenging weather conditions, making it a sturdy timber class.

 

The photo above illustrates how timber has shown attractive returns over the years in comparison to other investment classes (figure from Emerald Knight Belem Sky investment prospect)

It all sounds pretty good but how has this investment performed this far?

I was initially excited about this investment - pretty good returns and investing in something that brings something good to the locals in Brazil. The returns from the thinning process 2012 (around 10% of initial investment) were going to be paid out in January this year. Unfortunately this didn't happen and there was no communication about it from GFI until March when I emailed them and asked for the returns... The reason was apparently that it had been severe weather in the Belem region with heavy rainfalls that had delayed the thinning process. It seemed to be a fair explanation and I would have been ok with this little hiccup in the investment process but the payment delay continued. And continued... I still haven't received the promised payment and now it is eight month delayed! GFI has come up with more reasons for the delay but all is perceived as quite unprofessional to me. Emerald Knight has recently established a specific email-address for questions related to this issue so there seems to be quite a few investors experiencing the same problem... Maybe it is the first time GFI has this kind of project and I and the others investors waiting for money are “guinea pigs”? I hope not, but it sure seems that way. GFI has promised a compensation for the delay but I will believe it the day I see the money. My wife is quite pissed at me since I invested our common money and she is nagging me about it every other day – so I really hope I will see that money soon, especially since she doesn’t want to discuss new investments until I retrieve the funds!

 

Investment summary

 

I will update if and when I receive my funds, so stay tuned and subscribe to my blog (at the top right on my blog) - don’t miss out on more interesting stories!

Brazilian social housing investment “minha casa, minha vida” - Bosque Residencial

 

 

“With a population now exceeding 200 million, Brazil needs more houses! Lower-income families are facing a housing deficit of 8 million homes, set to grow to over 12 million by 2023. We are helping to solve their problem.”

 

 

This is how the investment prospect starts to describe the investment that I have made recently. The investment is a “social housing investment”, which I have made through Emerald Knight Consultants, an investment broker specializing in Socially Responsible & Sustainable Investments (http://www.emeraldknightconsultants.com/). The issuing company of the investment is EcoHouse Developments, an award winning property developer of social housing programme in Brazil (http://www.ecohousedevelopments.com/). “EcoHouse was founded in June 2009 and are now a global organisation with an annual turnover of 65M and offices in London, England - Natal, Brazil - Toronto, Canada - Dubai, UAE and Singapore. We have an expanding workforce of over 1040 full time employees across the globe which includes over 900 full time buildcrew onsite in Natal, Brazil.”

So what is a social housing?

EcoHouse Developments describes the social housing investment as following:

‘Social housing’ is a term used for homes provided by a government for families with modest incomes. The economy of Brazil has now grown to become the 6^th biggest in the world (overtaking the UK at the end of 2011) and is continuing to rise. This means that the demand for housing has of course increased. Property supply simply can’t keep up with demand and added to this millions of families in Brazil already live in sub standard housing. In 2009 the government decided to act decisively to tackle this problem. So the Minha Casa, Minha Vida social housing scheme was launched! The ‘MCMV’ scheme aims to build three million homes over a five-year period. This big investment has a government budget of around R$100 billion (approx £40 billion/US$65 billion/€ 45 billion). The first phase of Minha Casa, Minha Vida Brazil was launched in early 2009 and aimed initially to build a million houses throughout Brazil. In June 2011 the government announced the start of a second phase comprising a further two million properties.

How does the investment work?

The investment is quite simple. Private persons invest in off-plan property developments in Brazil. Once the property is built and sold to an individual in Brazil, the investor gets the invested money back. Plus a 20% interest rate - in one year!

So why did I invest in this?

There are a number of attractive reasons why I did this investment. Some of them are (not individually ranked):

·         High returns. The returns are set to 20% within 12 month. Not bad!

·         Short-medium investment horizon. The 12 months investment period is a good short investment period, so my money is not tied up too long. Also, there is a chance to prolong the investment period with a similar investment with the same company (a three year investment if I have understood it correctly)

·         Brazil is an excellent place to invest in and the investment type is in high demand. Being one of the famous BRIC-countries, Brazil is definitely a good place to invest in. It has rapid growing economy with high GDP-growth and has a high housing deficit. The picture below illustrates this very well:

 

Picture above comes from the EcoHouse investment prospect

·         A proven investment. The developer is an award winning developer with offices worldwide with proven track record and identical projects already delivered on time. According to Emerald Knight, investors in EcoHouse’s previous investments have received their money back earlier than the agreed 12 months!

·         A social responsible investment. Helping to solve the housing deficit by building houses for people in need of properties with good standard

·         A relatively safe investment. The investment is backed up by the Brazilian government and protected by a Lloyds TSB Escrow facility that offers 100% security. The worst case scenario in the project is that all money is returned to the investor if the project does not go ahead for whatever reason

I will write more about this investment in later postings so you can see if this investment turned out as planned! In one of my next postings I will write about the results from an exciting investment I have made – a carbon credit investment. So stay tuned and subscribe to my blog (at the top right on my blog) - don’t miss out on more interesting stories!

(Flag-picture above from: bestflag.blogspot.se/2012/09/brazil-flag.html)