Australia’s UniSuper has joined forces with retirement funds from the UK and the Netherlands to acquire private forest management firm Forico as well as plantation forestry in the state of Tasmania from a fund managed by Australian investment manager New Forests Advisory Pty Ltd. for an undisclosed sum.
Unisuper’s partners in the deal are the UK’s Pension Protection Fund (PPF), and APG Asset Management on behalf of its Dutch pension fund client Stichting Pensioenfonds ABP.
They will each own one-third of Forico and the 170,000 hectares of plantation forestry. Forico is the largest private forest management company in Tasmania.
New Forests Advisory will be retained to provide investment management services, UniSuper, PPF and APG say in a statement on October 5.
Sandra Lee, head of private markets at UniSuper, says the superannuation fund is “delighted” to invest in the assets, noting that forestry is a portfolio diversifier and also supports the global transition to decarbonisation through carbon storage and substitution to sustainable timber material.
“This adds further momentum to our growing private markets and forestry portfolios, as we continue to be on the lookout for quality investments that help our members grow their retirement savings over the long term,” she says in the statement.
Forestry is an important asset class for the PPF and the investment “further underpins our commitment to investing responsibly”, according to Alex Leonard, head of infrastructure, timberland and farmland at the pension fund.
“Our focus on using our funds in these longer term productive investments, in both UK and global markets, is important for sustainable growth and productivity. We are particularly attracted to the strong growth prospects for hardwood fibre, and Forico’s position at the forefront of advances in silviculture, the circular bioeconomy and natural capital,” he says.
Hans-Martin Aerts, head of infrastructure and natural resources at APG Asset Management Asia says, investing in the forestry asset class provides an opportunity to deliver "strong returns for our pension fund client ABP and its participants, while contributing to sustainable development goals around climate action, improving livelihoods and sustainably managing land".
"We’re looking forward to our continued involvement with this market-leading vertically integrated sustainable forestry business,” Aerts says.
Melbourne-based UniSuper had A$15 billion (US$9.52 billion) of private market assets as of end-June.
London-based PPF had £39 billion (US$47.36 billion) of assets under management as of end-2022, while Amsterdam-based APG managed about 540 billion euros ($567.53 billion) of pension assets as of end-July.