Swedish pension fund AMF has agreed to acquire 89.9 per cent of Bergvik Skog Öst, which owns over 317,000 hectares of woodland in central Sweden, making its first direct investment in forestry.

The fund is buying the 89.9 per cent of outstanding shares in BSÖHolding AB, valued at SEK 12.2bn, from BillerudKorsnäs Skog & Industri AB. Bergvik Skog Öst AB comprises a total of 363,000 hectares of land, of which 295,000 hectares of productive forest land, mainly in central Sweden.

Commenting on the acquisition, AMF head of alternative investments Katarina Romberg said AMF already owns forest indirectly via holdings in listed forest companies, but that now, the pension fund also has “direct investment in well-managed and responsibly used forests through the purchase of one of Sweden's largest forest-owned companies”.

“Forest is well suited to our strategy to increase the proportion of alternative investments, such as wind power and infrastructure in the portfolio. We see that the Swedish forest is a good long-term investment that can also play an important role in the transition to a more sustainable society,” Romberg said.

The company is today owned by BillerudKorsnäs, which will retain a minority share. As part of the transaction, long-term contracts are entered into with BillerudKorsnäs for the supply of timber.

AMF head of capital management Tomas Flodén said: “Our mission is to give our four million savers as good and safe occupational pensions as possible. Investing in forest suits AMF's long-term investment horizon well and should contribute to a stable and sustainable return over time.

“It is an important piece of the puzzle in the portfolio to be able to meet tougher market conditions or if the current low-interest rate situation becomes permanent,” he said.

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