Acquisition in one of the core regions of the US forestry industry for sustainable management in close consultation with local service providers.
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Shortly after its first investment, the MEAG Sustainable Forestry Equity Fund has made its second transaction, acquiring 3,100 hectares of forest in the US state of Alabama with tree stands consisting mainly of loblolly and slash pines, whose wood is supplied almost exclusively to paper mills and sawmills in the US southern domestic market.
Mathias Schwermer, Head of Forestry Investments at MEAG: “We are delighted to have performed this successful acquisition in one of the core regions of the US forestry industry. Our forestry experts in Munich and the US will immediately begin sustainable management of the land in close consultation with local service providers and will work specifically to optimize the existing management practices.”
Jasper Renk, Senior Investment Manager at MEAG: “The acquired forest is characterized by a good mix of older and younger stands. A balanced mix is important for regular yields and the most consistent value growth possible.”
Alexander George, Director Institutional Clients at MEAG: “This transaction is the second investment for the MEAG Sustainable Forestry Equity Fund, which offers institutional investors a broadly diversified portfolio of professionally managed forest land. Forest investments in the US combine stable returns with financially sustainable asset preservation – a growing capital asset in harmony with nature.”
MEAG Kapitalanlagegesellschaft designed the investment strategy for the MEAG Sustainable Forestry Equity Fund and advises on its execution. Hauck & Aufhäuser Fund Services Group (“HAFS Group”) is the asset servicing partner responsible for the operational management and administration of the product. The fund offers an attractive opportunity to invest in forest land. At least 5% of capital commitments will be allocated to projects for the initial afforestation of land. The planned investment regions are the US (60-80%), Australia, and New Zealand (10-20% each). When implementing investments, the aim is to acquire large, contiguous areas that can be managed efficiently. In addition to the geographical focus, the selection of forest areas also takes into account the types of tree species, the age structure and harvestability of the forest, as well as the respective national wood markets. A comprehensive due diligence process is carried out before each investment is presented.
Munich Re's expertise supports MEAG KAG in the selection process by assessing natural risks and the impact of climate change on the respective locations.
As advisor to the fund, MEAG KAG reviews the implementation of the sustainability-related investment strategy defined for the fund with regard to compliance with the relevant sustainability criteria for investments. The forests are also managed in accordance with FSC or PEFC certification, and ongoing CO2 accounting is maintained.
MEAG is the asset manager of Munich Re. With branches in Europe, Asia and North America, MEAG also offers its extensive know-how to institutional investors and private clients from outside the company group. MEAG currently manages assets to the value of around €355bn, €63bn of which for non-Group investors.
