MEAG has acquired 33,000ha of land in Finland for €166m, marking its entry into the Finnish forestry market.
The asset management arm of insurer Munich Re has agreed to acquire the forest properties of the United Bankers-managed UB Nordic Forest Fund II.
The deal also gives MEAG ownership of wind power leases on properties owned by Fund II.
MEAG already manages forestry primarily in North America, Australia and New Zealand.
Jyri Hietala, CEO of UB Nordic Forest Management, said: ”Finnish forest land offers an excellent way to diversify investments into an asset class that provides stable returns independent from financial market developments.
“The transaction was driven by MEAG’s strategy to expand the forestry exposure of its clients into Finland, where the buyer has no previous forest holdings.”
Hietala said the transaction gave MEAG ownership of a “large and well-managed portfolio of forest properties which together with a long-term cooperation agreement with UPM-Kymmene will secure professional management of the forest assets also in the future”.
Patrick Anderson, CEO of United Bankers, said: “The current transaction shows that the valuation levels of our forest funds are moderate when compared to the return requirements of large investors for forest investments.
“The transaction also demonstrates the effectiveness of our buy-and-build strategy. Interest in the forest as an investment will remain high thanks to both the environmental values of well-managed forests and the increasing and more diversified end-use of wood.”
Following the deal the area of forest properties owned by United Bankers funds will be approximately 133,000ha in total, held through the UB Nordic Forest Fund III, UB Nordic Forest Fund IV and UB Timberland funds.
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