NETHERLANDS - The €211bn Dutch pension fund ABP has made its first foray into timberland investments with a $60m allocation to the Global Solidarity Forest Fund (GSFF).
The fund will develop three sustainable forestry projects in the Republic of Mozambique, in south-eastern Africa, and Angola, in west Africa.
Heerlen-based ABP, Europe's largest pension scheme, will acquire a stake of 60% in the fund through its 10-year investment.
"The GSFF is managed by the Global Solidarity Fund International (GSFI), an international investment manager owned by the Swedish diocese Västerås, the Lutheran church of Sweden and the Norwegian ‘Lutheran Church endowment'," ABP said in a statement.
ABP sees the investment as a desirable way to diversify as it said in a statement: "It delivers a stable [investment] and is expected to deliver high returns, too."
Projects will be certified by the Forest Stewardship Council (FSC), which has set up guidelines for sustainable forestry management, and the fund has committed itself to the United Nation's Global Compact principles.
The scheme, which has allocated 2% of its entire assets to its new so called ‘innovation portfolio', has no specific target for further forestry investments.
"Any further investments depend on the possibilities presenting themselves," a spokesman told IPE today.
Earlier this month, the €85bn Dutch healthcare workers' pension fund PGGM also made its first allocation to forestry, with a $200m (€150m) 15-year forestry mandate.
PGGM chose US asset manager GMO, who will invest the money in its Long Horizons Forestry Fund in North and South America as well as the Asia/Pacific region.