By Virginia Furness
LONDON (Reuters) - BNP Paribas (OTC:BNPQY) Asset Management said on Thursday it had bought a majority stake in a Danish firm specialising in woodland and agricultural investments.
The purchase of the stake in International Woodland Company, which has more than $5.7 billion in assets under management, means BNP Paribas will for the first time offer its clients direct investment in woodland and agricultural land.
Buying agricultural or woodland for financial returns remains niche but is growing, with the likes of BNP Paribas saying it has the potential to offer investors protection from inflation while also helping safeguard the natural environment.
Climate conscious investors have channelled billions of dollars into clean energy but investment flows into protecting and better managing the world's ecosystems remain minute by comparison.
The U.N. says investors need to provide $384 billion per year by 2025 to guard against threats of climate change and loss of natural resources. A U.N. summit to halt nature loss begins this week in Montreal.
Asset managers have started to launch biodiversity and nature-focused funds but their size is tiny.
"Private finance clearly has a role to play in addressing the challenges of increasing and protecting natural capital, as well as appealing to institutional investors looking to diversify into uncorrelated assets that can offer an inflation hedge and enhanced risk-adjusted returns," BNP Paribas Asset Management said in a statement.
It did not disclose the terms of the deal.