The National Pension Service of Korea (NPS) has committed $150 million to the latest global timberland fund by London-based real assets and private markets investment firm Stafford Capital Partners.

Stafford said on Thursday (February 18) that NPS is investing in Stafford International Timberland IX Fund to gain exposure to a global portfolio acquired mainly through a secondaries investment strategy. It is the first timberland investment by NPS.

SIT IX, launched in August 2019, has already committed $208 million into seven investments across the US, Australia and New Zealand. It is currently targeting $750 million of commitments with the final close in April this year.

“We recognize commercial and environmental benefits of timberland investments in the shift of living environments based on our study of this particular sector for the past several years,” said Ahn Hyo-Joon, Chief Investment Officer of the NPS.

“NPS’ commitment to timberland is well aligned with our strategy to enhance the sustainability of our global portfolio. It will also help to diversify alternative investment assets with the risk-adjusted return.”

Stephen Addicott, Managing Partner of Timberland at Stafford, added: “NPS’ investment into SIT IX comes at an opportune time as we continue to see growing consumer demand for sustainable products.

“With a 17-year track record in timberland management, we are pleased to see that an increasing number of large institutional investors around the world are identifying the attractive combination of financial returns and sustainability benefits that an investment in timberland provides.”

According to Stafford, investments into mature timberland assets provide consistent annual yields from timber harvesting and capital growth through log price appreciation, land appreciation and increases in standing volumes. 

Global demand for timberland products has consistently grown over the past 50 years and their sustainable nature should boost demand in the next 10 to 20 years.  

NPS had assets under management of 807.3 trillion won ($728 billion) at the end of November, with overseas alternative investment assets accounting for 65.2 trillion won, or about 8.1%. (Reporting by Capital Connect staff)