Inside information: The sale of the forest properties of United Bankers’ UB Nordic Forest Fund II LP agreed upon with Munich Re Group’s asset manager, MEAG
United Bankers Plc
INSIDE INFORMATION
4 March 2024 at 17.50 EET
Inside information: The sale of the forest properties of United Bankers’ UB Nordic Forest Fund II LP agreed upon with Munich Re Group’s asset manager, MEAG
The sale of approximately 33,000 hectares of forest properties and partnership interests in UB Nordic Forest Fund II LP, managed by United Bankers, has been agreed upon with MEAG today. MEAG, an asset management company of the Munich Re Group, acts on behalf of its Group client in the transaction. MEAG manages large forest areas primarily in North America, Australia and New Zealand.
The closing of the transaction is subject to certain customary conditions agreed in the purchase agreement. The transaction is to be completed on or around 8 March 2024.
Upon completion, the buyer will pay a total purchase price of approximately EUR 166 million to the seller. The transaction strengthens the attractiveness of large forestry portfolios especially in established timberland market for institutional investors. The purchase price is paid in cash. Besides the value of the forest properties, wind power leases on properties owned by the fund, which will generate future rental income for the buyer, have been taken into account in determining the purchase price. The internal rate of return (IRR) for investors in the fund is 13.3 per cent per annum. UB Nordic Forest Management Ltd, a subsidiary of United Bankers, records a performance fee of approximately EUR 18 million for the transaction, of which over EUR 10 million will be booked in United Bankers’ operating profit for 2024.
UB Nordic Forest Fund II LP is United Bankers' second private equity fund investing in physical forest properties, having started its operations in 2015. The fund has 23 investors.
”Finnish forest land offers an excellent way to diversify investments into an asset class that provides stable returns independent from financial market developments. The transaction was driven by MEAG's strategy to expand the forestry exposure of its clients into Finland, where the buyer has no previous forest holdings. UB Nordic Forest Fund II LP offers the buyer a large and well-managed portfolio of forest properties, which together with a long-term cooperation agreement with UPM-Kymmene Plc will secure professional management of the forest assets also in the future”, says Jyri Hietala, CEO of UB Nordic Forest Management Ltd, explaining the background to the transaction.
“The current transaction shows that the valuation levels of our forest funds are moderate when compared to the return requirements of large investors for forest investments. The transaction also demonstrates the effectiveness of our Buy and build strategy. Interest in the forest as an investment will remain high thanks to both the environmental values of well-managed forests and the increasing and more diversified end-use of wood”, says Patrick Anderson, CEO of United Bankers Plc.
After the transaction, United Bankers remains the fourth largest private forest owner in Finland through its forest funds. After the sale of UB Nordic Forest Fund II LP’s forest assets, the area of forest properties owned by United Bankers’ funds will be approximately 133,000 hectares in total. United Bankers will still continue investing in forests through three funds: UB Nordic Forest Fund III LP and UB Nordic Forest Fund IV LP, as well as UB Timberland Fund (AIF), of which the latter two are open to investors.
The final completion of the transaction will be announced separately.
Additional information:
Patrick Anderson, CEO, United Bankers Plc
Email: [email protected]
Telephone: +358 400 244 544, +358 9 25 380 236
Jyri Hietala, CEO, UB Nordic Forest Management Ltd
Email: [email protected]
Telephone: +358 40 359 3566, +358 9 25 380 358
Investor Relations: [email protected]
United Bankers in brief:
United Bankers Plc is a Finnish expert on wealth management and investment markets, established in 1986. United Bankers Group’s business segments include wealth management and capital markets services. In asset management, the Group specialises in real asset investments. United Bankers Plc is majority-owned by its key personnel and the Group employs 160 employees (FTE) and 31 agents (31 December 2023). In 2023, the United Bankers Group’s revenue totalled EUR 52.1 million and its adjusted operating profit amounted to EUR 16.9 million. The Group’s assets under management amount to approximately EUR 4.6 billion (31 December 2023). United Bankers Plc’s shares are listed on Nasdaq Helsinki Ltd. The Group companies are subject to the Finnish Financial Supervisory Authority’s supervision. For further information on United Bankers Group, please visit www.unitedbankers.fi.
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