Campbell Global: Headed for the trees

In 2021, Campbell Global was acquired by JP Morgan Asset Management in what it termed “an effort to directly impact the transition to a low-carbon economy and provide ESG-minded investment opportunities related to climate, conservation and biodiversity”.

Campbell Global is a global investment manager focused on timberland, based in Portland, Oregon. It has four decades of experience selecting and managing more than 5m acres for pension funds and other institutional investors.

At the time of the acquisition, JP Morgan said the transaction would “not impact current investment strategies for Campbell Global clients”.

In October 2024, Campbell Global was hired by fast-growing UK workplace pension scheme NEST to manage a global portfolio of direct investments in timberland. At the time, Campbell Global CEO John Gilleland said: “Timberland represents a unique investment that offers NEST’s members the opportunity to combine investment and sustainability goals, which include enhanced portfolio diversification, a hedge against inflation, carbon removal to help mitigate climate change, and the preservation of biodiversity.”

Campbell Global primarily focuses on core timberland markets in North America, Chile, New Zealand and Australia. Speaking to IPE Real Assets, Gilleland explains that these areas supply wood products to the “key demand regions” in the US, Europe and Asia and the “high-growth demand regions” of China and India. “These regions have developed markets with active buyers and sellers of both timber and timberland, and they have a high degree of institutional ownership of timberland with the required infrastructure to support the investments.” 

Campbell Global also seeks markets with “established manufacturing and reliable transportation networks” and “areas that may be more resilient to the effects of climate change”, Gilleland says.

Key demand drivers

There are “numerous drivers which make timberland an appealing asset class”, including “several favourable market trends”, says Gilleland, including “high inflation, pent-up housing demand, particularly in the US and Australia, demand for wood as a renewable resource and sustainable construction material, and the scarcity of high-quality forestry assets”.  

Next is the growing interest in carbon offsetting – by both investors and corporates that are potential consumers of offsets. “We believe demand for voluntary carbon offsets is likely to further exceed supply in the near and mid-term, given the number of climate pledges or net-zero commitments made by a variety of business enterprises,” he says. “Nature-based forestry offsets are well positioned in the marketplace due to the attractive co-benefits and price points when compared to direct air-capture solutions.”

Investors, particularly in European markets, are also “showing increased interest in preserving biodiversity through their investments”, says Gilleland. Campbell Global is keen to stress its sustainability credentials and Gilleland says the firm “takes measures to identify and protect sites with ecologically significant species or features [and] seeks opportunities for partnerships with conservation agencies and organisations”.

All Campbell Global-managed properties are certified under the most applicable certification standard for each region.

Maximising the value of timberland investments requires “intensive oversight and administration of third-party contractors [and] a significant amount of local knowledge and expertise specific to this asset class”, says Gilleland. At acquisition, Campbell Global develops an initial long-term plan that identifies the various active management strategies that it will carry out. 

Gilleland says that in its chosen core regions, Campbell Global “seeks to invest in timber assets that grow key commercial species”, meaning primarily softwood (pine) in the Southern US and international regions, Douglas fir and western hemlock in the Western US, and pine and eucalyptus in non-US markets.  

In carbon markets, Gilleland seeks properties that are “ideal for improved forest management or afforestation projects that provide additionality, transparency and permanence [in] regions that offer diversification…. located in or near processing facilities for future income optionality”.

Active management strategies 

Campbell Global also develops a variety of active management strategies, including: marketing logs to domestic and export customers; integrating silviculture practices to boost forest productivity; lowering operating costs where prudent; increasing operating scale with bolt-on acquisitions; developing forest carbon projects, and increasing data quality and forest management efficiencies with technological innovation. 

Risk management is also a key element of the overall forest management philosophy. Gilleland says Campbell Global “has implemented a thorough and rigorous acquisition analysis and due diligence methodology that both focuses on identifying risks early and considers the unique characteristics of each investment region and potential asset”.

The firm seeks to “diminish economic risks through active forest management including portfolio diversification among geography and end-markets, and sound stewardship principles”, he says. Active forest management practices also aim to “mitigate both the frequency and magnitude of the potential impacts caused by physical risks”.

For Gilleland, the supporting fundamentals of the asset class remain strong. “Pent-up housing demand should continue to drive demand for renewable wood products, as new home construction, along with repair and remodelling comprise about 70% of lumber demand in the US and Australia,” he says. “US housing demand among younger homebuyers should continue to spur steady demand through 2025 and beyond, with increased demand in subsequent years as home prices and mortgage rates continue to moderate.”

Outside the US, Gilleland expects other established key trends to continue, such as Australia remaining a net importer of lumber, New Zealand rising to meet Asian demand for logs, and Chile being a significant exporter of forest products. “Investor interest in low-cost carbon removal strategies is also likely to contribute to demand for forestland, as growing trees remains one of the most cost-efficient ways to remove carbon from the atmosphere,” he says.

Gilleland expects demand for natural capital assets to grow. “Forestland investments [are] providing a leading role in supporting investor objectives, including carbon removal, sustainable investing and protecting biodiversity, while generating long-term strong risk-adjusted returns.”