Sampension makes DKK 1bn investment in American forest

Denmark’s Sampension has made an approx. DKK 1bn investment in forests in the southeastern states of the USA.

It has made a DKK 965m (USD 150m) commitment to US forest manager RMS and builds on the DKK 4.2bn investments in forests that it has already made, primarily in the USA and Australia.

“We have been investing in forests for a number of years and have an ongoing focus on expanding our investments. Because in the same way as investments in infrastructure and real estate, forest investments are a good alternative to bonds and can provide a sensible, stable and long-term return with limited risk. At the same time, this type of investment contributes to risk diversification in the investment portfolio,” Sampension investment director, Henrik Olejasz Larsen, said.

Sampension first invested directly in a forest in 2019, which is based in Oregon. Similarly, this new investment is also a direct forest investment.

“We want to invest directly in forests together with competent and specialised managers. Because in this way we have control over, and influence on, the investment and can, among other things, decide how much and when we will cut down trees, which on average have a biological growth of 3-4 per cent, per year. If the price of wood e.g. is low one year, we can fell less and leave the trees until the price is higher,” Olejasz Larsen explained.

The southern states of the USA have the world's largest forest market, and according to Olejasz Larsen, Sampension wants to gain exposure to that market.

“The wood from the area is primarily used for house construction, which is currently booming... However, it takes patience if one is to be successful in owning forests. Therefore, we see it as a long-term investment, where we plan to own the forests in the US south for many years,” he explained.

He also stated that this is a sustainable investment, which fits in well with Sampension's investment strategy.

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