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22-06-2021 11:46

Growing forests and harvesting returns

Nordea has entered into cooperation with Dasos Capital, the leading timberland fund manager in Europe. Our institutional and personal customers can now invest in an exciting and attractive investment alternative of a new timberland fund registered in Finland.

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.

Sustainability certified

“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.

About Dasos

Established in 2005, Dasos is a Finnish investment advisor to private equity funds investing in forests and natural capital, including land, biodiversity and water. It is run by an experienced European team with strong expertise in forests and long experience as an advisor and portfolio manager in major forest transactions.

Dasos invests only in forests which are certified or certifiable, focusing on sustainable long-term forest management.

Dasos is committed to contributing to the objectives of the Paris Climate Change Agreement on climate change to reduce global greenhouse gas emissions and improve transparency of carbon reporting.

Dasos is a signatory to the UN’s Principles of Responsible Investment (PRI), a member of Responsible Investment (PRI) and a member in Finland’s Sustainable Investment Forum (FINSIF).

The forest fund is open for subscriptions of a minimum of 5000 euro on a quarterly basis (the next deadline is 24 June) and redemptions are possible every six months.

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