Finnish asset manager Evli has launched a new forestry fund with a global mandate. With this global strategy, Evli expects that the fund will generate a higher return: For example, in the US, forestry has historically generated annual returns at more than 8 percent compared with 4.5 percent in the Nordic countries, writes Evli in a press statement.
The fund's main portfolio manager is Roger Naylor (M.Sc. Forest Economics), who has five other people in his team. Naylor has more than 16 years’ experience in forestry investing. According to Naylor, an investment of EUR 1m in the Evli Impact Forest Fund I might remove an estimated 21,000 tons of CO2 from the atmosphere.
"Trees simply grow faster in the countries where we will invest, and happily, this drives both the carbon impact and higher return. The fund’s carbon sequestration impact is monitored and reported to investors on a regular basis," Naylor says in the statement.
The fund is a fund of funds, with 6-8 global forest funds selected for the investment portfolio. The fund focuses on low-risk strategies and low-risk countries. Most of the investments are made in the United States, Australia and New Zealand.
"Up to 65 percent of the forest investments in our portfolio will be in the US. These forests provide good cash flow and are located in areas with large forest industries. Another important area is plantation forests in South America, where the trees grow exceptionally fast: eucalyptus trees, for instance, can grow many times faster than trees in Europe," Naylor adds.
"Forest investment complements Evli's offering of alternative investment products, and therefore clients are offered an even better opportunity to diversify their investment portfolios. In addition, forestry is a defensive asset class, which withstands economic fluctuations well," says Tero Tuominen, Managing Director of Evli Fund Management Company Ltd.
Evli's alternative investment product offering covers real estate, unlisted equities, infrastructure and forestry, which are managed through eight funds. Today, Evli's alternative investments portfolio management team consists of 20 investment professionals, and the funds' total assets under management have risen above EUR 1bn.
Evli has a total of EUR 13.6bn in client AUM.
English Edit: Nielsine Nielsen