Denmark’s Sampension is investing DKK1bn (€134m) in forestry assets in the south-eastern US, via timberland manager Resource Management Service (RMS), adding to its already large exposure to this asset type.
The labour-market pension fund said that before this commitment, it already had DKK4.2bn of forestry assets – over 177,500 hectares of land, saying it had a special focus on such investments in the US and, secondarily, in Australia.
Henrik Olejasz Larsen, CIO at Sampension, said: “We have been investing in forests for a number of years and have an ongoing focus on expanding our investments.”
Forestry assets, in the same way as investments in infrastructure and real estate, were a good alternative to bonds, he said, and could also provide a stable, long-term return with limited risk, while also contributing to risk diversification in Sampension’s portfolio.
Olejasz Larsen said Sampension wanted to gain exposure to the southern US forestry market – as the world’s largest for woodland – adding that the wood produced was mainly being used for housebuilding, which was a booming sector in the US currently.
“At the same time, the area in the US South is well-positioned to capitalise on the major planned expansions of the number of sawmills in the area that are declining products,” the CIO said.
Sampension, which manages DKK295bn of assets, made its first direct forestry investment over two years ago, in a forest in Oregon, US, putting “a triple-digit million Danish krone amount” into the assets.