Diversification
We aim at a well-diversified global timberland portfolio which combines the aspects of geographical, age and wood fibre as well end-use diversification. A relatively broad species/end-use mix offers diversification in terms of price exposure, changes in market conditions, natural risks, timing of harvests and rotation cycle. Investment into mature harvestable forests generates immediate, more secure returns while investment into younger assets provides potential for increasing yields and appreciation. Country diversification helps with addressing regional market variations, environmental and economic policy and related regulatory risks, and natural disaster risks as well as with providing exposure to climate zones with unique growing conditions and return potential.
Biological asset
Dasos focuses on what it sees as the primary driver of revenue generation, i.e. growing and harvesting trees sustainably and profitably with the objective of maximizing benefits from biological growth. Value is enhanced mainly by improving forest management, reducing inefficiencies in harvesting and marketing as well as improving the strategic positioning of the asset, e.g. through expansion or certification. For institutional investors, biological growth has unique features because trees grow all the time regardless of economic events or market fluctuations resulting in a predictable and positive carry and providing a natural inflation hedge. Additional revenue from environmental services is actively sought for but in most cases we see it as a complementary source of revenue. The ongoing discussions on the follow-up Kyoto agreement have increased the importance of forestry carbon credits, including those derived from avoided deforestation (REDD).
SRI/ESG
We put great emphasis on SRI/ESG issues. We have adopted a comprehensive Forest Investment Policy, which incorporates ESG-related principles and forest-sector specific environmental and social policies and guidelines. All our investments are made in accordance with the Equator Principles and we have also adopted key EC’s and IFC’s environmental and social safeguard principles. Our policy is to communicate openly about the environmental and social impacts of our operations.