Axa Investment Managers - Real Assets has acquired two forest estates in Finland, covering a total of 1,900 hectares.
The forests have been bought on behalf of an Axa insurance company for €7.7m ($8.2m), from UPM, one of the Europe's leading forest industry companies.
The transaction brings Axa IM - Real Assets' total forestry assets under management to about €110m, covering about 20,000 hectares.
The two forests are located in the Juuka and Pielavesi regions of Eastern Finland and are managed by UPM, which will continue to harvest timber and manage them in the most efficient and sustainable way possible, according to Axa IM.
Axa IM – Real Assets purchased three forest estates covering 3,700 hectares in Finland in February this year and it also manages around 14,000 hectares of forests in France on behalf of its clients. The firm said that, as a carbon-neutral asset class which is largely immune to economic cycles, forestry is a sustainable investment.
Christophe Lebrun, head of forest investment, real assets, said Axa IM sees forestry as a highly attractive asset class. It has a low environmental impact and allows the firm to achieve its clients' goal of offsetting the carbon footprint from their real estate investments.
The asset class also has strong underlying investment fundamentals, noted Lebrun. "Forestry is historically a highly stable investment which displays low volatility and a low correlation to equities, as well as a strong track record of outperforming other asset classes on both a long- and shorter-term basis."
AXA IM - Real Assets at present manages over €2.7bn of alternative assets, including healthcare facilities, hotels, data centres and forestry assets, primarily in Europe.
People:Christophe Lebrun