Nuveen launches global timberland strategy

Seeking to capitalize on growing investor demand for natural capital investments, global investment manager Nuveen has announced the launch of the Nuveen Global Timberland strategy.

The strategy from the firm which has over US$1 trillion in assets under management, seeks to provide investors with targeted exposure to sustainable timberland investments in core geographies, including the U.S., Chile, Uruguay, Canada, New Zealand, and Australia.

The investments will target a net total return of 5-7% p.a. from the sale of timber, land sales, carbon offsets, conservation easements and the natural appreciation of the assets, with a targeted 2-3% p.a. cash yield.

Nuveen believes the new approach provides 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.

Carbon Reporting

According to the Wuppertal Institute for Climate, Environment and Energy, global demand for timber is expected to grow by up to 200% by 2050, owing to increased demand from a continued growth in global population and per capita income, presenting a compelling return opportunity for timber production.

Natural climate solutions are the lowest-cost scalable route to climate mitigation and according to the World Resources Institute can provide up to 30% of the emissions reductions needed by 2030.

Commenting on the launch, Martin Davies, Head of Nuveen Natural Capital, said: “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.”

Carbon reporting based on the GHG Protocol and aligned with the IPCC Guidelines will provide quantitative data on carbon emissions and removals on an absolute and intensity basis. This will support institutions in their efforts to decarbonize portfolios and to advance their own climate targets. Forest carbon metrics backed by field data and tracked over time will quantify the climate benefits generated by the strategy.

#Nuveen #TimberlandAssets