DENMARK - ATP has revealed it is planning to invest up to DKK3bn (€402m) in forestry investments for its portfolio, and has made the first step with the DKK180m acquisition of a piece of US forestry.

The DKK355.6bn pension scheme has acquired the Upper Hudson Woodland in New York State, which covers 38,000 hectares, through ATP Timberland Invest K/S - a new subsidiary of the ATP Group.

It is the pension fund's first forestry investment, although it highlighted the asset class is characterised by a relatively high return and offers "valuable risk-diversification opportunities", because as the output can be tailored to meet demand, forestry earnings are "usually stable".

Henrik Gade Jepsen, chief executive of ATP Timberland and deputy CIO of ATP, said: "Trees are a solid investment and match our investment philosophy perfectly. At the same time, the purchase of the forest ties in well with ATP's increased focus on climate-related investments."

However, while the fund confirmed it is planning to invest up to DKK3bn in forestry through ATP Timberland, it said the forests must be sustainable and must be FSC-certified, which means economic, social and nature interests in the area are respected.

Jepsen added the pension fund "will own forests wholly. That way, we ensure that the forestry operation is conducted in a responsible and sustainable manner," and for that reason the firm said so far it will only invest in forests in North America, Australia, New Zealand and the EU.

The acquisition of Upper Hudson Woodland, which is wholly-owned by ATP with operations managed by RMK Timberland Group, follows yesterday's announcement that the pension fund had made its first steps into renewable energy through a global energy fund. (See earlier IPE article: ATP makes €300m foray into renewable energy)

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