APG makes strategic leap into Australian forestry

The leading Dutch pension fund manager has deepened its green credentials with the acquisition of Tasmania’s largest private forest management company.
APG makes strategic leap into Australian forestry

APG Asset Management (APG) has expanded its responsible investment portfolio with its latest direct investment into sustainably managed forestry.

In partnership with Australian superannuation fund UniSuper and the UK’s Pension Protection Fund (PPF), the $660 billion Dutch pension fund has acquired Forico, the largest private forest management company in Tasmania, and a sprawling 170,000-hectare plantation forestry estate.

Under the agreement, the three investors will each own a 33% stake of Forico and the forestry estate. New Forests will be retained to provide investment management services.

Ben Avery,

Taking a direct ownership interest provides APG with access to a market leading forest management platform in the Asia Pacific region, according to Ben Avery, senior portfolio manager for natural resources for Asia Pacific at APG.

"The plantation resource offers commodity exposure capable of delivering an attractive return for our pension fund client ABP,” Avery told AsianInvestor.

"Forestry assets of this size and market position rarely transact, and we were attracted to the dual benefits of a large-scale sustainable investment with positive environmental impact as well as compelling risk-adjusted returns,” he said.

APG secured this direct investment off-market outside of a conventional bidding process, which is unique given the increasingly competitive environment for assets in the forestry sector.


According to Avery, the acquisition isn't just about gaining control of a large plot of land. It's about acquiring an integrated operation that spans approximately 90,000 hectares of productive plantation forest.

“It comes with a comprehensive supply chain that includes two wood processing mills, a seedling nursery, a fibre technology laboratory, and port access via a freehold facility at Long Reach, Tasmania,” he said.

Behind this decision is APG's focus on sustainability, a move that is becoming increasingly crucial in asset management strategies globally.

“APG and its client ABP have demonstrated a commitment to aligning their investment strategy with sustainable practices,” said Avery.

For ABP, Avery explained, the acquisition is a significant step forward.

"Forico offers ABP a one-step scale entry into a market-leading, vertically integrated forestry operation underpinned by one of the largest plantation estates in Asia Pacific. The transaction further expands ABP’s responsible investment portfolio and direct investments into sustainably managed forestry assets," he said.


APG’s strategy in the forestry asset class is to deliver both acceptable investment returns together with positive environmental impact, according to Avery.

“Forico manages certified plantations which deliver a core economic return from the sale of forest products in commodity markets. It is also a responsible steward of significant natural infrastructure with assets such as trees, soil, air and water all essential to a wide range of valuable services important to society,” he said.  

The Dutch pension fund manager has also identified pathways to create value from these environmental assets both in terms of optimising the production of forest products and by managing the natural resources for positive impact.

“This includes initiatives designed to deliver improved carbon sequestration, climate regulation, and biodiversity conservation outcomes,” he said.

“Overall, we take a blended approach by embedding impact initiatives like biodiversity conservation and responsible investing principles together with the sustainable production of forest products to ensure we can deliver reliable long-term investment returns.”

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