In 2010, AP2 made its first investments in timberland and farmland, as part of its strategy for diversifying the overall portfolio. These investments are both considered to generate a stable return, in light of the fact that the underlying trend towards increased urbanisation and improved welfare, in combination with a growing global population, is increasing demand for forest and agricultural products. Both asset classes are also deemed to be relatively insensitive to cyclical fluctuations, added to the fact that covariance with other asset classes – such as equities – is considered to be low.


For AP2, it is important to choose fund managers that subscribe to the same values of long-term, responsible and sustainable investment. The Fund has elected to invest in farmland in the form of joint ventures with other investors, a form that suits the Fund’s long-term approach to these investments. The farmland investments are primarily located in Australia, Brazil, Poland and the USA. The main focus is grain production on large-scale, high-quality farmland, in countries that possess clearly-defined legal structures and are net exporters of agricultural products. AP2 cultivates no land. The land is leased either to local farmers/companies or administered by external managers for the joint-venture companies. AP2 is actively engaged in improving companies’ efforts concerning sustainability.


The majority of the Fund’s investments are in Australia and the USA, in forest assets that produce saw timber and pulpwood. All the funds/companies in which AP2 has invested are clearly focused on the sustainable, responsible ownership and management of their real-estate investments. AP2’s managers have policies and management systems for promoting sustainability and are engaged in finding markets for the ecosystem services the forest offers as well as conduct analyses to determine whether the forest real estate might be appropriate for inclusion in ‘carbon projects’.

Where possible, AP2 makes it a condition that fund managers should certify forest real estate in compliance with one of the international sustainability certification systems, Forest Stewardship Council (FSC) or the Programme for Endorsement of Forest Certification (PEFC). Even if the forest assets cannot be certified they will be managed in compliance with the certification principles implemented by these organizations.


Number of hectaresProportion, %
Certified timberland in accordance with the FSC and/or PEFC
127 21993
Timberland in the process of certification in accordance with the FSC and/or PEFC

 3 3553
Land that is sustainably managed in accordance with the FSC and/or PEFC, but that cannot be certifie
Other: Land taken up by e.g. roads, buildings and other non-productive areas or land that has not yet been planted
1 2531
The figures in this table are correct as at 31 December 2019.

More about the AP2’s investments in timberland and farmland in the Fund’s Sustainability Reports.