Investment manager Nuveen announced the establishment of the Nuveen Global Forest strategy, which aims to expose investors to sustainable timberland investment opportunities.
According to Nuveen, the launch of the new strategy coincides with growing investor demand for investments in natural capital, as global investors aspire to transition their portfolios to net zero by 2050.
The plan provides "a natural climate solution to reduce carbon emissions by producing more timber on less land, reducing emissions through efficient operational techniques, and storing carbon in soil and trees," according to the company.
Martin Davies, chief executive officer of Nuveen Natural Capital, stated:
Timberland is a natural investment in natural capital assets. Removing greenhouse gas emissions from the atmosphere using trees as carbon sinks is a proven and inexpensive approach. As countries move to low carbon, sustainable wood is an essential commodity for replacing carbon-intensive steel and concrete. We feel that this is one of the numerous elements that position timberland to provide clients with both attractive profits and climate solutions."
The strategy will seek investments in locations such as the United States, Chile, Uruguay, Canada, New Zealand, and Australia, and will target a net total annual return of 5 to 7 percent from the sale of timber, land sales, carbon offsets, conservation easements, and the assets' natural appreciation.
Nuveen Global Timberland will include Nuveen Natural Capital, the firm's land-based investment expertise, into the newly formed Nuveen Real Assets platform. The timberland division of Nuveen Natural Capital comprises over 100 investment and forest management specialists in ten countries.
"This strategy will provide clients with access to high-quality timberland assets with growth and sustainability at the core of the investment thesis." Real asset qualities make timberland an effective inflation hedge in the current economic climate, with downside risk mitigation against multiple economic cycles and stable income. This launch is the most recent move we've taken to strengthen our premier real assets offering for clients at a time when global investor demand is soaring."