“MEAG has decades of experience with forestry investments around the globe, and these have proven to be an important stability factor in our portfolio,” said Thomas Bayerl, MEAG managing director and global head of illiquid assets, in light of the fund achieving over $200m in commitments at its first closing. Photo: MEAG

“MEAG has decades of experience with forestry investments around the globe, and these have proven to be an important stability factor in our portfolio,” said Thomas Bayerl, MEAG managing director and global head of illiquid assets, in light of the fund achieving over $200m in commitments at its first closing. Photo: MEAG

MEAG’s Sustainable Forestry Equity Fund, domiciled in Luxembourg and focusing on ecological sustainability and diversification, has secured $207m in capital commitments for sustainable forest management in key markets, the asset manager reported.

MEAG, the investment branch of Munich Re Group, has announced the initial closing of its Sustainable Forestry Equity Fund at $207m. In compliance with article 9 of the EU’s sustainable finance disclosure regulation, the fund focuses on eco-friendly forest management in the USA, Australia and New Zealand. This funding primarily comes from German insurers and a pension scheme of a DAX-listed group, MEAG on Wednesday 28 February. Structured under Luxembourg’s laws as a SCSp Sicav-Raif and managed by Hauck & Aufhäuser Fund Services in Luxembourg, the fund aims to reach an asset value between $500m and $700m.

Scheduled to make its first investments in the first half of 2024, the fund is set to prioritise markets recognised for their professional standards and the appealing risk/return ratio they offer to investors, said MEAG in its press release. This strategic focus is further underscored by the fund’s investment in a variety of wood types and usage forms, enhancing diversification within its investment class.

Thomas Bayerl, MEAG’s managing director and global head of illiquid assets, highlighted the value of forestry investments for portfolio stability, especially given the current market volatility. He was pleased with the fund’s initial closure, crediting MEAG’s global forestry investment experience.

MEAG noted the unique aspects of forestry investments, such as their low correlation with other investment types and their potential for long-term growth, driven by the rising demand for sustainable building materials. Frank Becker, responsible for institutional clients at MEAG, pointed out the forestry asset class’s newness for many investors and the trust MEAG has built using its expertise, offering both long-term returns and sustainability.

The Sustainable Forestry Equity Fund expands MEAG’s range of alternative assets, allowing institutional investors to diversify their portfolios with a focus on both environmental and social benefits, MEAG stated. Holger Sepp, a board member at Hauck Aufhäuser Lampe Privatbank, shared his enthusiasm for supporting MEAG’s ambitious project with their experienced, Luxembourg-based custom asset servicing solutions.

MEAG, serving as the insurer Munich Re Group’s asset manager and catering to a broader clientele of institutional and private investors, currently oversees assets worth approximately €340bn, of which €60bn are managed for external investors.

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