AXA forestry portfolio grows to €130m

The firm has been increased its exposure to European timberland through a property in France, having snapped up several Finnish forests from UPM last year.

AXA Investment Managers has bought the 958-hectare Domaine de Saint Augustin forest in the Allier départment of France for €21.5 million, bringing the value of its 20,500 hectares of timberland to €130 million.

The acquisition will diversify AXA’s forestry portfolio because it is deciduous, which AXA says allows for flexibility in meeting fluctuations in demand for different wood types. About half of AXA’s forestry assets are deciduous and the other half coniferous, with some areas also set aside for leisure-activity related revenues.

The forest is within close distance of a new wood energy plant.

“Following our forestry acquisitions in the Nordics last year on behalf of one of our clients, this transaction is indicative of our strategy to diversify our clients’ European forestry portfolios both geographically and through types of tree, which is an important tool for benefitting from peaks in demand and the provision of steady and secure income returns,” said AXA IM head of forest investment Christophe Lebrun.

The real assets forestry portfolio now consists of 5,500 hectares in Finland and 15,000 in France. AXA bought 3,700 hectares of forest last February in Finland for €11.2 million, bringing its total forestry assets to a value of €100 million. In November it bought a further 1,900 hectares in Finland for €7.7 million in November 2015. Both properties were bought from and continue to be managed by Helsinki-based forestry manager UPM.

AXA IM – Real Asset, based in France, manages €3 billion in alternatives assets, including hotel and healthcare interests.