AXA Investment Managers – Real Assets (‘AXA IM – Real Assets’), the leading real estate portfolio and assets manager in Europe, announced that it has acquired two forest estates in Finland as part of its alternatives investment strategy. The forests cover a total of 4,695 acres and have been acquired on behalf of an AXA Insurance Company for €7.7m, from UPM, one of Europe’s leading forest industry companies and a major forest owner. This transaction brings AXA IM – Real Assets’ total forestry assets under management to approx. 49,421 acres totalling approx. €110m.
The two new forests – located in the Juuka and Pielavesi regions of Eastern Finland - are currently managed by UPM who will continue to harvest timber and manage them in the most efficient and sustainable way possible. AXA IM – Real Assets recognises the importance of sustainable investment in terms of the ability to reduce the environmental impact as well as a source of long term revenue and value generation. Forestry is a sustainable investment as it is a carbon neutral asset class which is largely immune to economic cycles.
The acquisition, along with the purchase of three forest estates covering 9,142 acres in Finland in February this year, are in line with AXA IM – Real Assets’ strategy to diversify its clients’ forestry portfolio into countries such as those in the Nordics.
Christophe Lebrun, head of forest investment, Real Assets, commented: “We see forestry as a highly attractive asset class, not only due to its low environmental impact and because it allows us to achieve our clients’ goal of offsetting the carbon footprint from their real estate investments, but also because of its strong underlying investment fundamentals. Forestry is historically a highly stable investment which displays low volatility and a low correlation to equities, as well as a strong track record of outperforming other asset classes on both a long and shorter term basis.”
“Having been one of the first international investment managers to enter the Nordic forestry sector earlier this year, we have continued to build on this momentum in line with our strategy of diversifying our clients’ European forestry portfolios into countries where industries related to this sector account for a significant proportion of Gross Domestic Product (GDP). This transaction also allows us to extend our partnership with UPM and underlines our ongoing strategy of extending AXA IM - Real Assets’ alternatives platform by partnering with operating companies that are market leaders in their sector and/or local geography.”
