NETHERLANDS - PME, the €19bn Dutch industry-wide scheme for metal and electro-technical engineering industry, has invested €250m in American forestry, the fund announced today in its third quarter results.

PME, the third largest fund in the Netherlands after ABP and PGGM, has bought around 30,000 acres of forest in Alabama, Tennessee and Michigan in order to diversify its portfolio, a spokesman said.

Since July this year the fund has invested 1.5% of its assets in the forestry project.

According to the fund, investments in forestry deliver a relatively stable and "interesting" return of around 7%, adding: "Plots of such scope and with the named return are rarely available, hence PME grabbed the chance".

PME is not looking to expand its investment at the moment, but if the right plot would come along it would consider increasing the portfolio, the spokesman explained.

PME said that, before investing, it had also "agreed with the management of the project to do the best they can to shift to sustainable forestry in a manner that would meet the criteria of the international FSC certificate for sustainable forestry within three years from now."

In may 2006, PME was one of the first pension funds around the world to sign the Principles for Responsible Investments, designed to persuade institutional investors to a more conscious attitude towards responsible and sustainable investments, including transparency to a broad public.

Furthermore, PME, which has since 2003 has built up its investment in commodities to 7% of its assets, disclosed that it had made a -17.1% return its commodities portfolio due to falling oil and gas prices in the third quarter.

Nonetheless, the scheme wants to continue investing in the volatile asset class, arguing "the enduring global growth makes investments in commodities for the long term still interesting," and despite the volatility of the class, commodities still decrease the entire risk profile of the fund, according to the spokesman.

Other investments of the fund, such as 46% in fixed income, 40% in shares and 7% in direct real estate, delivered good returns and caused an overall return of 4% for the fund.