Munich Re’s MEAG Raises Over $200 Million for Sustainable Forestry Fund

Munich Re Group’s asset manager MEAG announced today that it has raised $207 million in capital commitments at the first closing of its MEAG Sustainable Forestry Equity Fund.

Launched in 2022, the Article 9 fund invests in ecologically sustainable forest management, in alignment with the definition of the EU Taxonomy, in addition to contributing to several of the goals of the United Nations SDGs.

The first investments of the fund are scheduled for the first half of 2024, and will focus on forested land in the USA, New Zealand and Australia, with 5% of asset volumes to be invested in new afforestation.

Thomas Bayerl, MEAG Managing Director and Global Head of Illiquid Assets said:

“MEAG has decades of experience with forestry investments around the globe, and these have proven to be an important stability factor in our portfolio. In view of the challenging conditions on capital markets right now, we are even happier about the success of the fund’s first closing with more than 200 million US dollars.”

According to MEAG, forestry investments offer the benefit of a low correlation with other investment classes, in addition to long-term potential for value growth due to the globally rising demand for wood, fueled in particular by the trend towards sustainable construction and materials. The firm added that the fund can help institutional investors to integrate environmental and social aspects into their investments, with forests promoting biodiversity and carbon sequestration, while 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 expertise, we have been able to help build trust 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 needs-based solutions for its clients thanks to its many years of experience in the areas of risk management and sustainability.”

Capital commitments for the first close came from German insurers and the pension scheme of a DAX-listed company group. MEAG has set a target volume for the fund of $500 – $700 million.