The tree that outperforms venture capital is dying of old age

This is article 2 in the On Biological Time series. Here is article 1.

A good year on the coconut coast

In late August, the Philippines' coconut output for 2026 was projected at 15.24 million tonnes, its highest level since 2013, with coconut-product exports of $1.9 billion in the first half alone. Behind that rebound sits a national programme that the Department of Agriculture has pushed hard: President Marcos ordered the 2026 replanting target doubled from 25 million trees to 50 million, part of a plan to plant 100 million by 2028 and win back the position of the world's largest producer from Indonesia.

That is good news, and it deserves to be read as such. It shows that a government can move on a perennial crop at scale, and that trees put into the ground several years ago are now coming into bearing exactly when the biology says they should.

It also shows something less comfortable, which is the subject of this essay.

A provocation that is really arithmetic

On the TEDxBoston stage I made an argument that sounds like a provocation and is in fact arithmetic: that this tree's returns outperform venture capital funds. The talk walks through the numbers, and I will not repeat them here. This essay picks up where the talk ends, with the question in its title. If the tree is that good, why is it disappearing?

Start with how the two assets earn. A venture fund raises capital, deploys it over a few years and waits for one or two companies in the portfolio to return the whole fund. Everything rides on the outlier, and the fund is judged across a life of roughly a decade.

The coconut palm needs no outlier. It begins bearing at around seven years, its peak years run from roughly seven to twenty-five, and it keeps producing, at a declining rate, for decades after that. Every part of it has a buyer. My own catalogue of traded products from a single coconut palm runs to fifty-seven distinct outputs, from fresh water and virgin oil to coir rope, shell charcoal, activated carbon and, at the very end, the trunk itself. A tapped palm yields sap every day and a bearing palm yields nuts through the year, and it keeps doing both for a working lifetime while asking for very little in return.

Why the comparison feels absurd

The comparison feels absurd because finance prices assets by how fast they move, and the palm moves slowly. Nothing about it is legible on a quarterly cycle. Its value arrives as a long, low, compounding stream, and the instruments that allocate capital were built to find spikes rather than streams.

A fund that holds an asset for ten years cannot see one that peaks at year twenty-five. The coconut does not lose the comparison on returns; it loses on the calendar, because no fund is still alive to collect.

So the capital went elsewhere, and the trees were left to do what trees do on their own clock. They grew old.

Forty nuts instead of a hundred and twenty

The Department of Agriculture puts the country's standing stock at around 340 million trees, and its own figures show what age does to them. An ageing palm yields around forty nuts a year, against an optimal output of about a hundred and twenty. Around one in five Philippine trees is classified as senile, and the Philippine Coconut Authority estimates that roughly ten per cent of the stock is lost every year to age and other causes.

None of this is new. In 1983, an estimated 25 to 30 per cent of Philippine coconut trees were at least sixty years old, and by 1988 the figure was between 35 and 40 per cent. Even the modest replanting target of that era, 60,000 trees a year, was not met. The ageing that the current programme is racing to correct was visible in the data before most of today's procurement directors had started their careers.

Fifty million trees against three hundred and forty million

Set the new target against the standing stock and the shape of the problem becomes clear. Fifty million trees is a very large planting year, and it is still around one seventh of the trees already in the ground. If roughly a tenth of the stock, some 34 million trees, is lost each year, even a record planting year adds only modestly to the net stock once losses are counted, and the 8.5 million trees planted in 2024 replaced only about a quarter of that year's losses.

And every tree planted this season reaches its first meaningful harvest around 2033. No budget, no subsidy and no technology shortens that interval, because it is the minimum biological requirement of the organism. This year's rebound rests partly on trees planted around six years ago that are now entering full bearing, which means the harvest of the early 2030s is being decided now.

Old trees keep clean accounts

Here is the part that should trouble anyone who buys coconut at scale. A senile palm still stands. It still appears in the hectare count, still sits on the map and still shows up in the national statistics as a tree, and nothing about its status changes on paper until the day someone cuts it down.

So an estate can carry a steadily rising share of trees past their productive life while every report describing it remains accurate. The area is correct and the tree count is correct, while the decline lives in a dimension the reports were never built to measure, which is the age of what stands on the ground.

The same is true of the people. The farmers who planted those cohorts are ageing alongside them, and many of the sons and daughters who should inherit the groves have gone to the cities. The tree and its steward are reaching the end of the same cycle together.

What fifteen years in the groves taught me

I left investment banking for the ground, and I have spent fifteen years among smallholders in Indonesia and the Philippines. The lesson I keep relearning is that the most valuable thing on a farm is the one thing nobody writes down: how old everything is, and what that means for the next ten years.

A farmer reads it without being asked. He knows which rows are past their best and which will carry the family for another decade. He also knows that replanting means years of lost income before the new trees bear, which is why so few can afford to do it, and why the old trees stay standing long after they should have been replaced.

That knowledge never travels up the supply chain. By the time the coconut reaches a bottle, a carton or a capsule, it has been stripped of its age entirely, and it arrives as a commodity priced by the tonne with no memory of the tree it came from.

A stream the market cannot see

The market for coconut products is not short of demand. Philippine exports reached $3.6 billion in 2025, up from $2.7 billion the year before, and coconut oil alone accounts for more than four-fifths of export earnings. Prices across the region surged in 2025, with fresh coconut in parts of Southeast Asia rising by 50 to 100 per cent in a year as weather and disease squeezed supply.

That is what an ageing asset looks like from the buyer's side of the table. It does not announce itself as age. It arrives as weather, as disease, as a bad season or a strong one, and the price moves accordingly. The underlying stream keeps thinning in the background, and every good year makes it a little easier to believe that it is not.

The returns are still there

None of this weakens the argument I made in Boston; it strengthens it. An asset this productive, ageing this predictably, with this little capital paying attention to its age, is not only a crisis to be managed. It is a mispricing in plain view, and the countries now replanting at scale have already noticed it.

The tree that outperforms venture capital has not stopped performing. It has been left on the wrong side of the calendar by instruments that were never built to read it.

The questions that remain

The questions here are not really about coconut. They are about what your own instruments can see.

How much of what you buy comes from trees that were planted before your company was founded? How many of your suppliers could tell you the age of the groves behind their volume, and how many would find the question strange? When the senile share crosses the line where yields fall faster than replanting can replace them, which of your reports will be the first to notice?

The tree has always told the truth about time, and the harvest of the 2030s is being decided by whoever is listening now.

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