Timberland Investment

How do you profitably invest in a sustainably harvested forest while directing efforts toward clean water protection, flood control, habitat for fish and wildlife, soil building and carbon storage?

Industrial timberland is managed solely for the wood in the trees, but Ecotrust Forest Management, based in Portland, Ore., invests by putting its focus on entire forest ecosystems. It's creating markets around forest diversity by selectively harvesting trees rather than clear-cutting, and also selling everything from carbon credits and development rights to edibles such as honey or salal for floral bouquets.

This diversified approach to managing a forest renders the land more resilient, both ecologically and economically, said Ecotrust CEO Bettina von Hagen.

Since its inception in late 2004, Ecotrust Forest Fund I, with $30 million under management, had average gross returns per year through December 2012 of 10.6 percent compared to 8.17 percent during the same timeframe for the NCREIF Timberland Index. It won't update returns because it will be reopening the fund to investors in the next three to six months. The fee is 1.25 percent.

Ecotrust has raised $60 million for a second fund, which closed in December. It currently has 30,000 acres under management.