J.P. Morgan Global Alternatives, the alternative investment arm of J.P. Morgan Asset Management, announced the acquisition of more than 250,000 acres of commercial timberland in the Southeastern U.S. valued at over $500 million, stating that the assets will be managed “for both carbon capture and timber products.”
The transaction follows the acquisition by JPMorgan in 2021 of forest management and timberland investor Campbell Global, stating at the time that “J.P. Morgan Asset Management expects to become an active participant in carbon offset markets as they develop.”
Demand for carbon offset projects, often focused on such as reforestation or ecosystem protection, that counteract the release of greenhouse gases is expected to increase significantly over the next several years, as companies and businesses increasingly launch net zero ambitions, and turn to offsets as a bridge to their own absolute emissions reduction efforts, or to balance difficult to avoid emissions.
Timberland investments are positioned to play a significant role towards these goals, and asset managers have been increasing investment in the space and launching strategies targeting forest investments to capture the opportunity.
Anton Pil, Global Head of J.P. Morgan Global Alternatives, said:
“This transaction is one of the largest of its type in the past decade and builds on efforts to expand our asset class offering across alternatives by offering investors access to a robust carbon sequestration and timber management platform. We are committed to harnessing the extensive forest management expertise of Campbell Global to offer our clients the unique ESG benefits associated with timberland assets.”
According to JPMorgan, the properties acquired encompass more than 18 million metric tons of stored CO2 equivalents, including more than half a million tons retained in 2021.
In addition to carbon capture, the firm said that the assets will be used for timber production “to meet growing demand for sustainable building products,” in addition to other uses.
John Gilleland, Chief Executive Officer of Campbell Global, added:
“These acquisitions will give our clients access to sustainably managed forests that leverage our more than 40 years’ experience in timberland management.”