Forests and forest funds are hot investment themes at the moment. For many people investing directly in a forest property or buying and tending their own forest plot is not possible. But thanks to the partnership with Dasos Capital Nordea customers can now invest in a well-diversified and professionally managed timberland fund with a portfolio of European forests.
“Forestry investments were previously only available to institutional investors, but now private individuals can also invest in forests and they don’t need to worry about the complex nature of forest management. This fund is an easy, cost-effective and well-diversified way of professional ownership of mainly European forests”, says Tanja Eronen, who is in charge of investment products at Nordea.
“The forest fund’s steady return comes from growing trees. The fund managers work actively to make sure that the forest is managed in a professional way and also continuously seek additional streams of income. From an ESG point of view, it’s good to remember that sustainability certification of these forests is a fundamental aspect of this fund,” she continues.
Well-diversified forest investments generate a steady cash flow in all economic cycles and are generally less vulnerable to many forms of crises. Tanja Eronen considers forests an attractive addition to an investment portfolio in the current low interest rate environment but also a potential hedge against rising inflation. For moderate investors forest investments provide an attractive risk-return ratio with a lower risk than in equity markets, she points out.
Many demand drivers
Widespread e-commerce is one of the prevailing mega trends driving the packaging industry where new applications based on wood fibre are replacing plastic and contributing towards greater use of sustainable materials.
“A huge opportunity is currently emerging in the textile industry where wood fibre represents a promising substitute for cotton, which requires intensive use of water and fertiliser,” says Olli Haltia, Managing Partner of Dasos Capital Oy Ltd.
Further, demand for hygiene papers and tissue continues to grow steadily driven by the improving health standards in the emerging world as well as population growth.
“In the context of rapidly progressing global urbanisation, an important means to upgrade the lowish climate performance of the construction sector is provided by innovative engineered wood products, which have the potential to replace massive amounts of concrete and steel in buildings. Regarding such natural capital services as carbon sinks, water and biodiversity, the role of forests is becoming more clearly recognised with scope to market-based solutions,” Olli Haltia continues.