- Advertisement -
- Advertisement -

One of Finland’s Largest Forestry Transactions

Report: Systematic Strategies

- Advertisement -

Stockholm (HedgeNordic) – Finnish asset manager United Bankers has reached an agreement to sell 33,000 hectares of forests in Finland to MEAG, the asset manager of Munich Re Group. Acting on behalf of one of its clients, MEAG’s acquisition of a total forest area larger than the city of Munich marks one of the largest forestry transactions in Finland.

Upon completion of the deal, the buyer will pay approximately €166 million for the 33,000 hectares of forest properties and partnership interests of UB Nordic Forest Fund II LP. Launched in 2015, this fund represents United Bankers’ second private equity vehicle investing in physical forest properties. The agreed price, which reflects the value of the forest properties and future rental income from wind power leases on properties, translates to an internal rate of return (IRR) of 13.3 percent per annum for investors in the fund. After the sale, United Bankers remains the fourth largest private forest owner in Finland through its forest funds, with a total forest area of approximately 133,000 hectares.

“Due to the great success of the forest investment program for Munich Re Group, MEAG has decided to offer its market access also to other institutional investors,” says Wendelin von Gravenreuth, Head of Illiquid Assets Forestry at MEAG. “These investments are ideal for long-term investors who are looking for inflation-protected returns, attractive cash flows and a low correlation with other asset classes,” he continues. “We are pleased that by investing in Finland, we are further enriching our diverse portfolio in one of the most developed forestry markets.”

“Due to the great success of the forest investment program for Munich Re Group, MEAG has decided to offer its market access also to other institutional investors.”

Wendelin von Gravenreuth, Head of Illiquid Assets Forestry at MEAG

“Finnish forest land offers an excellent way to diversify investments into an asset class that provides stable returns independent from financial market developments. The transaction was driven by MEAG’s strategy to expand the forestry exposure of its clients into Finland, where the buyer has no previous forest holdings,” Jyri Hietala, CEO of UB Nordic Forest Management Ltd, explains the background to the transaction. “UB Nordic Forest Fund II LP offers the buyer a large and well-managed portfolio of forest properties, which together with a long-term cooperation agreement with UPM-Kymmene Plc, will secure professional management of the forest assets also in the future.”

“The transaction also demonstrates the effectiveness of our Buy and Build strategy.”

Patrick Anderson, CEO of United Bankers Plc

“The current transaction shows that the valuation levels of our forest funds are moderate when compared to the return requirements of large investors for forest investments,” adds Patrick Anderson, CEO of United Bankers Plc. The forestry team at United Bankers employs the strategy of buying individual properties or small pools of properties to drive asset value growth through the ‘buy and build’ premium created when acquiring nearby properties to achieve operational synergies. “The transaction also demonstrates the effectiveness of our Buy and Build strategy,” confirms Anderson. “Interest in the forest as an investment will remain high thanks to both the environmental values of well-managed forests and the increasing and more diversified end-use of wood.”

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

Study by Invesco and AP4 Maps the Road to Carbon Neutrality

Stockholm (HedgeNordic) – Invesco and the Fourth Swedish National Pension Fund (AP4) have teamed up to create a practical guide for investors aiming to...

Nordic Managers Take Home Multiple HFM Awards

Stockholm (HedgeNordic) – Around this time last year, only three Norwegian hedge funds returned from London with trophies from the HFM European Performance Awards,...

Borea Onboards Equity Managers Ahead of UCITS Fund Launches

Stockholm (HedgeNordic) – Borea Asset Management, a Norwegian boutique specializing in fixed income, has officially welcomed Jon Hille-Walle and Audhild Aabø, two newly recruited...

Month in Review – September 2024

Stockholm (HedgeNordic) – With just three months left in the year, the Nordic hedge fund industry is on track to deliver its best performance...

UB FIGG Taps Forestry Expertise to Guide Private Equity Investments

Stockholm (HedgeNordic) – Historically, private equity has outperformed public markets over the long term. While the allure of high returns in private equity is...

The Private Equity Allocation of a Smaller Institutional Player

Stockholm (HedgeNordic) – Alternative asset classes have gained popularity during the decade-long low-interest-rate environment as investors sought higher returns and diversification. However, the recent...

Allocator Interviews

In-Depth: Commodities

Voices

Request for Proposal

- Advertisement -