AXA IM acquires 24,000ha of Australian forestry business

26 July 2021

AXA IM, through AXA IM Alts, a global leader in alternative investments with c. €162 billion (A$260 billion) of assets under management, announces that it has agreed to acquire approximately 24,000 hectares of Australian woodland and an associated forestry management business from investment funds advised by Global Forest Partners LP (“GFP”).  

The acquisition of the Green Triangle Forest Products (“GTFP”) estate is being made on behalf of clients by AXA IM Alts’ market leading Real Assets team and will be one of the largest investments into the Australian forestry market by value in over a decade.

The estate is one of the largest in Australia’s premier forestry region, the Australian Green Triangle forestry region, which is located in south-east South Australia and south-west Victoria (Tarpeena, Cafpirco, Kongorong, Caroline, Kentbruck and Dartmoor). It includes over 22,000 hectares of productive and sustainably managed land comprising a mixed-age portfolio of exclusively Radiata Pine forests which serve as one of the major suppliers of sawlog and forms an integral part of Australia’s largest domestic processing region.

Funds advised by GFP first invested in the GTFP estate in 1999 and took full ownership in 2008. Over this period, the business has continually invested in improving the forestry management and operation of the portfolio to help create a high quality sustainable plantation estate in the Green Triangle region.

The forest’s significant carbon sequestration characteristics also aligns well with AXA IM’s wider approach to responsible investment and ambition to seek opportunities that combat climate change, preserve biodiversity and provide sustainable returns for its clients. The portfolio currently has an estimated carbon stock of over 8,000,000 tCO2 stored within the biomass of the forest; a figure that AXA IM believes can be greatly improved over time via adjustments to the planting and harvesting schedules.

Due to the low-carbon properties of the softwood timber grown at the estate, the acquisition also presents AXA IM with an opportunity to support efforts to reduce embodied carbon within Australia’s construction and housing markets. 70% of GTFP’s harvest is currently manufactured into high value structural timber for the construction industry. This acquisition significantly adds to AXA IM Alts’ existing global portfolio of forestry assets, with the business managing almost 60,000 hectares across France, Ireland and Finland, and marks AXA IM Alts’ first investment into Australia’s forestry market.

Isabelle Scemama, Global Head of AXA IM Alts, said “I am very proud of this transaction which adds to our growing global portfolio of forestry assets, now exceeding 80,000 hectares. This new investment in sustainably managed forestry is also a further step in our decarbonisation strategy and a way to accelerate our transition to a net zero environment.”