BNP Paribas Asset Management has acquired a majority stake in Danish timberland and farmland investment firm International Woodland Company. Financial details were undisclosed.
The acquisition is part of BNPP AM’s efforts to expand its private markets and sustainable investment offering to meet “the needs of investors who are increasing allocations to sustainable private investment strategies,” a statement said.
IWC was founded more than 30 years ago and has $5.7 billion in assets under management, $4.8 billion of which is dedicated to institutional timberland mandates.
The company expanded into agriculture in 2017 and also provides ecosystems services including carbon credits and conservation projects.
A spokesperson for BNPP AM told Agri Investor: “BNPP AM has followed the natural capital space for some while, with discussions with IWC accelerating when we noticed growing investor interest, ultimately leading us to acquire a stake in a specialist player in the market.”
“Across our entire product range, we aim at expanding the range of investment solutions with a climate or environmental objective. In so doing, we can facilitate institutional investors’ direct participation in financing, for example, the energy transition by investing in companies, projects and assets that provide products and services supporting the energy transition.”
The spokesperson added that the acquisition of IWC is not expected to change any existing investments in third-party funds that follow similar strategies to those provided by IWC, “although going forward, BNPP AM is likely to increasingly leverage IWC’s existing expertise,” they said.
The French firm will also “be expanding its range of sustainable thematic products with the launch of nature-based solutions, likely to cover areas such as forestry, agriculture and carbon optimization,” with the spokesperson only adding that “further details will be available in due course.”
BNPP AM said its research showed institutional timberland investment is worth less than $100 billion per annum, while governments annually spend around $500 million on activities that can be harmful to biodiversity.
“Nonetheless, the natural capital market is evolving rapidly, encouraged by initiatives from the United Nations and other supranational agencies, and expected to be accompanied by the continued development of associated investment and growing client awareness,” a statement said.
“Private finance clearly has a role to play in addressing the challenges of increasing and protecting natural capital, as well as appealing to institutional investors looking to diversify into uncorrelated assets that can offer an inflation hedge and enhanced risk-adjusted returns.”