What is ROI and How to Calculate It
Using Vendasta’s ROI calculator, agencies and local businesses can now calculate ROI more efficiently and productively, thereby mitigating pain points.
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What is ROI and How to Calculate It
Using Vendasta’s ROI calculator, agencies and local businesses can now calculate ROI more efficiently and productively, thereby mitigating pain points.
What Is A Good Return On Investment (ROI)
When it comes to ROI what matters is not how much you get back, but what you get back. Apart from making a profit on your investment, there can be no dollar amount or percentage value that can justify the ROI for an agency.
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Harvard’s Natural Resource Investments: 13% Annual Growth Over Ten Years
Jane Mendillo – head of Harvard University’s $32 billion endowment – has been keen on agriculture ever since she recommended it to her then-boss Jack Meyer in 1997, as a young member of the investment team.
Their agricultural interests lie in timber these days. Their farmland focuses on pine and eucalyptus trees which – whilst used to make charcoal and feed pulp mills – are a major source of logs sawn for Brazil’s growing furniture industry.
Harvard’s long-term involvement with agriculture has always been part of an institutional preference, seeing it as a safeguard against future crashes in the market, as well as a way to invest into sustainable, carbon-free enterprises.
“What I want is properties that produce something that the world is going to want more of, and the increase in the supply is difficult,” Mendillo said in an interview earlier this year in the Federal Reserve Bank in Boston. “Timberland is the perfect example.” It also is an area where she believes Harvard has an edge, she says: “A lot of other investors don’t have the expertise, don’t have the team to go out and look at individual timberland or other natural resources and decide what they think are the higher-potential or higher-risk situations.”
According to Jack Lutz – an economist at Forest Research Group – Harvard stands out amongst other universities, not just because of the size of the deals it does, but because it’s one of the first schools to directly buy farmland real estate (as opposed to investing in shares of funds) and actively manage it themselves. “Harvard goes into places no one else goes into,” he declared. “They’re willing to accept more risk than most.”
Since taking control, Mendillo has upped Harvard’s involvement in forests, farms, and other sustainable investments, and it now accounts for 10 per cent of the its entire portfolio – a little over $3 billion.
“We have a very high conviction that if we create value in the portfolio by increasing the health of the forest, increasing the forest itself, allowing it to mature while we hold it, we’re going to be able to sell at a better price. It’s economically and environmentally driven.”
In 2004, Harvard outbid Chinese finance and real estate company – China International Trust & Investment – for the cutting rights to the Kaingaroa pine plantations in New Zealand. Shortly after, Mendillo then acquired one of the largest private holders of timberland in Romania – with 86,500 acres valued at $100 million.
By Q4 2011, Harvard’s endowment had provided a twenty year return of 12.9 per cent, in spite of the financial turmoil, currency madness and its substantial losses in 2009. According to its annual reports, Harvard’s natural resources investments have had average year-on-year gains of 13 per cent over the past ten years, including 19 percent in 2011. Harvard’s private equity managers – such as Boston’s Bain Capital – only returned 7 percent over the same period.
“We are long-term investors, and that means we are concerned with sustainability and stewardship,” Mendillo said.