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AXA IM completes Australia’s biggest forestry deal in over a decade
Pine trees in the Australian Green Triangle forestry region.
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  • AXA IM has made its first investment in Australia, purchasing 24,000 hectares of woodland in the Australian Green Triangle for $775 million
  • The estate is located in of Australia’s largest forestry regions, Australian Green Triangle forestry, which is located in South Australia and Victoria
  • AXA IM said the transaction gives it the potential to assist initiatives to decrease embodied carbon in Australia's building and housing sectors
  • AXA IM Alts global head Isabelle Scemama said the acquisitions bring its global portfolio of forestry assets to over 80,000 hectares

AXA IM has acquired 24,000 hectares of woodland in the Australian Green Triangle in a $775 million deal, the company's first investment into Australia.

The transaction of the pine plantations straddling Victoria and South Australia by the investment house is one of the largest investments into the Australian forestry market by value in over a decade.

The deal was orchestrated through AXA IM Alts, the alternative investment asset manager that has roughly $260 billion under its management.

AXA IM Alts' current worldwide forestry portfolio will be considerably expanded by the transaction, which includes almost 60,000 hectares in France, Ireland, and Finland.

The estate is one of the largest in the Australian Green Triangle forestry region, which spans southeast South Australia and southwest Victoria.

It encompasses approximately 22,000 hectares of productive and sustainably managed property, including a mixed-age portfolio of Radiata Pine forests that serve as one of Australia's primary sawlog suppliers and are a key component of the country's biggest domestic processing region.

It also agreed to acquire the associated forestry management business from investments funds advised by Global Forest Partners (GFP).

The acquisition of the Green Triangle Forest Products (GTFP) estate is being made on behalf of clients by AXA IM Alts Real Assets team.

In 1999, GFP-advised funds made their first investment in the GTFP estate, and in 2008, they acquired full control.

The forest's considerable carbon sequestration qualities match with AXA IM's broader approach to responsible investing and goal to find opportunities that "combat climate change, preserve biodiversity and provide sustainable returns for its clients". 

GTFP presently has a carbon stock of nearly 8,000,000 tCO2 stored in the forest biomass, a figure that AXA IM believes may be substantially enhanced over time by adjusting the planting and harvesting timetables.

AXA IM said the transaction gives it the potential to assist initiatives to decrease embodied carbon in Australia's building and housing sectors, thanks to the low-carbon qualities of the softwood timber cultivated on the estate.

Currently, 70 per cent of GTFP's harvest is converted into high-value structural wood for the building sector.

AXA IM Alts global head Isabelle Scemama said the acquisitions bring its global portfolio of forestry assets to over 80,000 hectares.

"This new investment in sustainably managed forestry is also a further step in our decarbonisation strategy and a way to accelerate our transition to a net zero environment," she said.

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