Investing in Forests with JP Morgan Asset Management

Acquisition of Forest Management Company Campbell Global

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Byunghee Park] JP Morgan Asset Management has ventured into forest investment, which is gaining value as part of efforts to reduce greenhouse gases.

On the 21st (local time), JP Morgan announced the acquisition of Campbell Global, a company that manages forests on behalf of institutional investors such as pension funds and insurance companies, according to a report by The Wall Street Journal (WSJ) on the same day.

BrightSphere Investment Group sold its stake in Campbell Global to JP Morgan. The terms of the acquisition were not disclosed. However, WSJ reported that the value of the forests managed by Campbell Global is estimated at $5.3 billion.

As calls to reduce greenhouse gases grow worldwide, forests are increasing in value as tradable assets. Dense forests absorb carbon dioxide from the atmosphere, which is recognized as reducing greenhouse gases, thus becoming a source of revenue for forest owners. As the carbon-offset market expands, more companies are investing in forests.

British Petroleum (BP) also acquired Finite Carbon, the largest carbon-offset company in the UK, last year. Salesforce.com and Microsoft invested in Natural Capital Exchange (NCX) last month. NCX connects companies aiming to protect forests with forest owners.

Anton Phil, head of JP Morgan Asset Management’s alternative investments division, said, "The carbon-related market will increase the value of forests," adding, "We want to play an active role in the greenhouse gas reduction market."

Campbell Global manages a total of 1.7 million acres of forest in the United States, New Zealand, Australia, and Chile. It has about 150 employees, of whom approximately 100 manage forests and the remaining 50 are investment experts. Campbell Global has managed forests for over 30 years and recently entered the carbon market.