Breaking Down Risk in Emerging Markets with Peter Chappell

Join me today in the first of a two-part series, as I speak with Peter Chappell, Investment Manager at Finnfund - the Finnish Development Finance Institution which, like the country, has a long history of investing in forests. In our conversation, Peter explains why Finnfund’s mandate is for greenfield investments, and why financial viability is one of their primary impact criteria. We discuss the risks in the emerging markets where Finnfund invests, compared to those in timberland core markets. We discuss how to evaluate risk and the merits of forest investment in emerging markets, and talk about why its important to go in with an experienced partner. Next week, be sure to tune in, where we discuss the impact-side of Finnfund’s forest investment approach with Anne Valto.    “But actually, our thesis is quite strong that ultimately the realisation of these positive impacts can only be sustained through financially viable, financially sustainable, you know, long term, successful businesses.”Show notes:Host: Shauna Matkovich - The Forest Link Producer: Magdalena Laas - https://www.linkedin.com/in/laasmagdalena/Details 01:36Introduction to Finnfund and their approach to forest investment04:54Financial instruments used by Finnfund in forest investment07:02Timberland in core versus emerging markets11:03Real vs perceived risk13:33Greenfield vs brownfield16:27Tips for investors considering emerging markets for the first time19:51Red flags to look out for in emerging market deal evaluation22:16Impact in emerging markets vs core markets27:53Challenges leading to emerging market track record30:46Other benefits of emerging market forest investmentSignificant quotes:[14:48]            "One of the issues we have as a DFI is that actually a pure brown field operation doesn't actually fit our mandate because we need to ensure we're making impact."[21:10]           "Generally speaking, execution risks are the big risks."[25:32]          "But actually, our thesis is quite strong that ultimately the realisation of these positive impacts can only be sustained through financially viable, financially sustainable, you know, long term, successful businesses."Links mentioned:Finnfund: https://www.finnfund.fi/en/ Sound Library:Nature by MaxKoMusic/SoundcloudSopwell Woodlands and Scohaboy Bog SAC, Cloughjordan, Co Tipperary, IRELAND by wild_rumpus/SoundcloudSign up now for the ForestLink’s newsletter, where you’ll receive technical advice, reflections, and best-practice guidance to support you with your forest-linked investment strategy or business straight to your inbox. Hosted on Acast. See acast.com/privacy for more information.