Investing with vision: Why an investment advisor bets on forests

His Danish partner is Dalgas, owned by Hedeselskabet, which helps investors find and purchase forestland in Estonia, Latvia, and Lithuania, and then manages the forest according to the investor’s wishes.

Although he only visits his Latvian forest two or three times a year, Gustav D. Lassen emphasizes that forest investment comes with a broader sense of responsibility:

- As a long-term investor, you’re not just the owner of a forest property — you’re also a caretaker of a piece of nature that’s been part of a local community for centuries. That requires you to act responsibly.

- If you do your homework and choose forestland in an area with sufficient rainfall and good soil drainage, trees will grow regardless of the broader economy. As an investor, you can simply let the trees stand for a year or two if timber prices drop. Wood is storable. If you have a long-term investment plan, forests provide stable returns and are a great way to diversify a portfolio, says Gustav D. Lassen.

Forest investment isn’t geographically limited to the Baltic states, but in 2000, Gustav D. Lassen chose Latvia for one simple reason: more forest for the money and the ability to register ownership.

- At the time, I believed it was highly likely that the Baltic countries would aim to grow their economies, promote traditional industries, and eventually become integrated with Scandinavia — as they historically have been. I still believe that’s the main scenario for the region. I considered other countries, but the combination of lower prices and Latvia’s orientation toward Scandinavia and the EU made the decision for me. Timber can be sold at the same market prices as in Europe, and today the infrastructure and forest industry are on par with other countries. Moreover, Latvian forestland is still significantly cheaper than comparable land in Sweden.

Estonia, Latvia, and Lithuania are all EU members and have joined both the eurozone and NATO since Gustav D. Lassen’s initial investment.

According to him, this is one of the reasons why forests remain attractive to investors. Add to that the still-low prices, low interest rates, and generally low-cost levels in the Baltics, and you have compelling arguments for why forest as an asset class is both interesting and a sensible way to diversify a portfolio:

- For me, a long-term approach is essential. Forests keep growing even when stock markets fluctuate. A forest investment offers not only diversification but also a stable asset that appreciates over time. Trusting an experienced partner with local expertise was crucial for me.