Munich Re Group asset manager MEAG announced today that it has raised US$207 million in equity commitments in the first close of its MEAG Sustainable Forestry Equity Fund.
Launched in 2022, the Article 9 fund invests in ecologically sustainable forest management, in alignment with the EU Taxonomy definition, as well as contributing to several of the UN SDG objectives.
The fund's first investments are scheduled for the first half of 2024 and will focus on forest land in the USA, New Zealand and Australia, with 5% of asset volumes to be invested in new forestry.
Thomas Bayerl, Managing Director of MEAG and Global Head of Illiquid Assets said:
“MEAG has decades of experience with forestry investments around the world and these have proven to be an important stability factor in our portfolio. Given the challenging conditions in the capital markets at the moment, we are even happier with the success of the fund's first close with over 200 million US dollars.”
According to MEAG, forestry investments offer the benefit of a low correlation with other investment classes, in addition to the potential for long-term value growth due to the growing global demand for wood, fueled in particular by the trend towards construction and materials. sustainable. The company added that the fund can help institutional investors integrate environmental and social aspects into their investments, with forests promoting biodiversity and carbon sequestration, while also providing jobs and recreational spaces.
Frank Becker, MEAG Managing Director responsible for institutional clients, said:
“The forestry asset class is still uncharted territory for many investors. With our many years of experience, we have been able to help build confidence in this exciting asset class. The combination of long-term returns and sustainability is particularly attractive. As a subsidiary of Munich Re, MEAG is also ideally positioned to develop solutions based on the needs of its clients, thanks to its many years of experience in the areas of risk management and sustainability.”
Capital commitments for the first closing came from German insurers and the pension scheme of a group of companies listed on the DAX. MEAG has set a target volume for the fund of $500 to $700 million.
