Korea Investment Management Launches Asia's First 'Forest Investment' Preparation

Plan to Launch Fund Within the Year... Leading Global Alternative Investment ESG Trends

[Asia Economy Reporter Hwang Yoon-joo] Korea Investment Trust Management is set to launch Asia's first forest fund that directly invests in overseas forestlands.

Korea Investment Trust Management announced on the 29th that it will begin pre-marketing with the goal of launching the 'Forest Fund' within the year. Once the fund is launched, capital will be deployed through a capital call method. The preparation for the forest fund launch is part of the 'Cooperation Agreement (MOU) on Climate Change Response in Developing Countries' recently signed between Korea Investment Holdings and KOICA.

Korea Investment Trust Management is operating a Real Asset Alternative Investment Establishment Team to set up a specialized real asset alternative investment management company. The team is preparing a real asset alternative investment product that secures forest resources mainly in Vietnam, which has abundant tropical forest resources, to generate profits. The product combines revenues from 'timber' and 'carbon credits.'

Forests (timberlands), which are representative carbon sinks essential for responding to climate change, have recently emerged as promising alternative investment asset classes. Korea Investment Trust Management's forest fund plans to monetize not only timber revenues generated through sustainable forest management but also voluntary carbon credits directly created through nature-based carbon reduction projects utilizing natural forests. This differentiates it from existing overseas forest funds, mainly invested in by foreign pension funds, which have focused solely on timber (logging) and forestland value appreciation as their primary sources of income.

The forest fund seeks stable timber revenues from an investment return perspective while also capitalizing on the upward trend in voluntary carbon credit prices. For domestic companies, it is expected that they will be able to directly secure carbon credits from the greenhouse gas reduction projects invested in by this fund.

A representative from Korea Investment Trust Management explained, "This product, which will be Asia's first forest fund, holds significance in transforming the perception of 'nature' into 'asset' and developing new revenue sources in the global alternative investment sector."

This content was produced with the assistance of AI translation services.