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AP3 continues shift to direct forestry investments with $500m deal

The Swedish pension has roughly $1bn in total forestry investments, around 80 percent of which is through direct and co-investment structures.

AP3’s acquisition of 300,000 acres of Texas timberland forms part of the Swedish national pension fund’s strategy of bringing all its forestry investments in-house.

AP3 closed the $500 million deal with TexMark Timber Treasury, a joint venture managed by New York Stock Exchange-listed REIT Catchmark Timber Trust, on September 2.

The pension made the shift to direct and co-investments with its forestry assets in 2014, when it had roughly SKr4.5 billion ($540 million; €455 million) invested through funds.

Dan Bergman, AP3’s head of ILS and timberland investments, confirmed to Agri Investor that the pension now has SKr2 billion invested through timberland funds, with SKr8 billion invested through direct structures.

He added that Hancock Natural Resources Group “was instrumental to the success of the acquisition with their expertise and deep market knowledge.” He confirmed that Hancock would manage the asset.

Bergman declined to disclose AP3’s target allocation for timberland, but he did confirm that “the overall allocation target has not yet been reached.”

In a statement released by AP3, Bergman said: “This investment is part of AP3’s strategy to build a sustainable and robust portfolio – a portfolio that can deliver good returns also under negative climate scenarios.

“We see great potential in our strategic collaboration with Hancock Natural Resource Group – it will enable us to contribute more to the long-term supply of sustainable forestry products.”

Hancock acquired 12,874ha of eucalyptus plantations in Brazil for an undisclosed price in April. The firm acquired the rights to a further 43,332ha of Brazilian timberland and completed a deal for 89,000 acres of US timberland in August.