Danish labour-market pension funds Sampension and Lærernes Pension have announced a new investment in eucalyptus plantations in Tasmania via a consortium including an unnamed UK investment fund.
The two pension funds said the consortium, led by sector specialist Global Forest Partners, has made an investment in 36,504 hectares of eucalyptus plantations in Tasmania.
Between them, the Danish pension funds said they paid “a three-digit million” kroner sum for the assets.
Majken Hauge Johansen, head of alternative investments at Sampension, said: “An investment like this is good for the environment and provides a stable return.”
She said the labour-market pensions provider had just expanded its forestry portfolio in the US, and was now expanding in Tasmania as well.
Sampension already co-owned just under 31,000 hectares of eucalyptus plantations, she said, and could achieve a number of economies of scale.
“Global Forest Partners is a local manager that we know and have worked with for a number of years,” said Hauge Johansen.
The two pension funds said eucalyptus was mainly used to produce pulp and that as trees were felled, the areas were replanted.
The plantation just bought was FSC (Forest Stewardship Council) certified, they said, obliging the forest owner to adhere to the 10 basic principles of responsible forest management, including workers’ rights and conditions of employment, indigenous peoples’ rights, environmental values and operational planning.
Helle Ærendahl Heldbo, head of the unlisted fund investments at Lærernes Pension, said the FSC certification had been an important element of the investment deal.
“In addition, it is also worth noting that the total investment binds approximately 290,000 tonnes of CO2 per year, which corresponds to about 24,000 pension scheme members’ annual CO2 emissions,” she said.
Danish forestry investment firm IWC was an external adviser for both Danish pension funds in connection with the investment, the funds said.
Lars Holm Simonsen, head of IWC’s timberland business, said factors making the Tasmanian investment attractive included the growth rates of the eucalyptus trees, the fact that the manager had control of the supply chain from forest to consumer, and a consumer market where the need for sustainable, FSC-certified quality wood had increased in recent years and was expected to increase further.
Last May, Sampension made its first direct forestry investment with a DKK500m (€67m) deal in Oregon, US.