Investment manager Nuveen announced today the launch of the Nuveen Global Timberland strategy, aimed at providing investors with exposure to sustainable timberland investment opportunities.
According to Nuveen the new strategy is being launched amidst growing investor demand for natural capital investments as global investors seek to transition portfolios to net zero by 2050.
Timberland investments are positioned to play a significant role towards these goals, the firm said, with the strategy providing “a natural climate solution to reduce carbon emissions by producing more timber on less land, reducing emissions through efficient operating practices and sequestering and storing carbon in soil and trees.”
Martin Davies, Head of Nuveen Natural Capital, said:
“Timberland is an intrinsic investment in natural capital assets. With trees storing carbon it is a proven and low-cost technology to remove greenhouse gas emissions from the atmosphere. As economies transition to low carbon, sustainable timber is a crucial material in replacing carbon intensive steel and concrete in building construction. We believe this is one of the many factors that position timberland to deliver both attractive returns and climate solutions for clients.”
The strategy will seek investments in geographies including the U.S., Chile, Uruguay, Canada, New Zealand, and Australia, and will target a net total annual return of 5-7% from the sale of timber, land sales, carbon offsets, conservation easements and the natural appreciation of the assets.
Nuveen Global Timberland will sit the firm’s land-based investment specialist, Nuveen Natural Capital, part of the newly structured Nuveen Real Assets platform. Nuveen Natural Capital’s timberland team employs over 100 investment and forest management professionals across 10 countries.
“This strategy will offer clients access to quality timberland assets with compelling growth and sustainability central to the investment thesis. In the current economic environment, real asset characteristics make timberland an attractive inflation hedge, with downside risk mitigation against different economic cycles and stable income. This launch is our latest step in bolstering our first-class real assets offering for clients, at a time when global investor demand is growing rapidly.”