Investment manager J.P. Morgan Natural Capital, through its local subsidiary Bosques San Pedro SpA, has concluded an agreement to acquire approximately 60,000 hectares of forest land in Chile from Forestal Mininco, a subsidiary of the pulp and paper giant Empresas CMPC, for 365.5 million US dollars, paying ~5,460 euros per hectare. The assets sold are located in the Maule region in central Chile and are primarily productive Monterey pine (Pinus radiata) plantations. The acquired area accounts for ~5% of all forest properties owned by CMPC. The deal includes a long-term timber supply agreement, meaning CMPC will continue to purchase timber from these areas as raw material for its cardboard factory in the Maule region. A portion of the sum will be paid upfront upon closing the deal, with the remainder to be paid gradually as the properties are registered in the buyer's name; this process will take approximately three months.
What is the background of the deal?
To clearly understand why the deal is taking place right now, one must consider the strategic goals of the parties involved and recent events... The sale is not coincidental – it is part of CMPC's long-term asset management strategy, which aims to monetise non-strategic assets to strengthen the company's balance sheet.
CMPC is currently evaluating the ambitious Natureza pulp mill project in Brazil; its costs are estimated at ~4.6 billion US dollars. The project has faced financial complications and litigation related to environmental impact (licensing) and consultations with indigenous communities, although an initial environmental licence was received in October 2026. The company's net debt-to-EBITDA ratio reached 4.17 times in the second quarter of 2026, which significantly exceeds the company's target range of 2.5-3.5 times. The company is in acute need of immediate cash before embarking on its largest investments.
A month before this deal – in September 2026 – CMPC agreed to sell its Chilean corrugated packaging business to Smurfit Westrock for 420 million US dollars. Together, both deals provide the company with planned asset divestment proceeds of approximately 785.5 million US dollars within less than a month.
The J.P. Morgan perspective – expanding the forestry and sustainability platform
J.P. Morgan Asset Management is noticeably increasing its presence in the region, focusing on the management of natural resources and carbon credit (ESG – Environmental, Social, and Governance) assets. J.P. Morgan's foray into forestry investment began in 2021 when the bank acquired the specialised forest management firm Campbell Global. Recently, in September 2026, this unit was renamed J.P. Morgan Natural Capital to more accurately reflect the focus on nature-based assets in institutional portfolios.
The deal in Chile follows another very ambitious move in the region – in September 2026, J.P. Morgan Natural Capital announced a plan to invest 200 million US dollars to create a large forestry platform in Paraguay together with Grupo Robinson. These investments are being made through the bank's global climate and forestry fund – Forestry & Climate Solutions Fund II, which closed its capital raise in the spring of 2025 with 1.5 billion US dollars.
The megaproject in Brazil and its challenges
The Natureza pulp mill planned by Empresas CMPC in the municipality of Barra do Ribeiro, in the state of Rio Grande do Sul, is one of the largest industrial projects in Brazilian history.
The factory is planned to produce 2.5 million tonnes of bleached eucalyptus pulp per year. Investments total approximately 4.6 billion US dollars for the mill itself, plus at least another 2.8 billion US dollars for forestry infrastructure, timber supply chains, and logistics – totalling around 7.4 billion USD. The project also includes the construction of a new port terminal for transporting timber via waterways.
Naturally, this project is also facing increased involvement from environmental defenders, local communities, and law enforcement authorities. The main cause of legal disputes is the impact of the factory and the necessary eucalyptus plantations on local indigenous and Afro-Brazilian rural communities, the so-called quilombolas. To ensure that the company conducts full and free consultations with these communities before building permits are issued, the Federal Public Prosecutor's Office (MPF) has intervened in the process.
Eucalyptus trees grow very quickly, and their plantations consume large amounts of groundwater. Critics have raised concerns about threats to local ecosystems and traditional agriculture. Environmental activist organisations point out that converting vast areas into eucalyptus monoculture plantations, or so-called green deserts, reduces the region's biological diversity.
CMPC is trying to mitigate these risks by directing the funds obtained from the sale of forest lands in Chile directly towards stabilising this balance sheet, so that the level of debt liabilities does not jeopardise the project's financing.
Why are large investment funds actively buying up forests?
Financial giants J.P. Morgan, Brookfield, and BlackRock have become some of the largest forest owners in the world in recent years. This trend is driven by three main factors – carbon credits, biodiversity requirements, and hedging against inflation.
Companies around the world are setting targets to reach net-zero greenhouse gas emissions. Since it is impossible to stop emissions completely in many sectors, companies are buying carbon credits to 'neutralise' them. Forests absorb carbon dioxide, and institutional funds such as J.P. Morgan Natural Capital acquire forests, certify them according to international carbon standards like Verra or Gold Standard, and sell the carbon sequestration credits on exchanges or directly to polluting companies, such as airlines and technology giants.
Traditionally, forests were bought solely for timber harvesting, but now funds mathematically calculate the most profitable option – whether to let the trees grow and profit from carbon credits or to harvest them. Often, the highest return comes from a combined model – sustainable forestry together with the generation of carbon credits.
Biodiversity, natural capital, stability, and an inflation 'hedge'…
Pension funds and university endowments, which are the main investors in J.P. Morgan funds, demand that their money be invested in environmentally friendly assets. Funds that cannot demonstrate strong ESG – Environmental, Social, and Governance – scores are losing capital. The financial world is starting to view clean water, healthy soil, and biological diversity as measurable financial value. For example, the J.P. Morgan Forestry & Climate Solutions Fund II, which raised 1.5 billion USD, was created for this very purpose.
Unlike shares or bonds, trees grow regardless of economic crises, bankruptcies, or geopolitical conflicts. If timber prices fall on the market, the trees can simply be 'stored on the stump' and left to grow in the forest to become 'larger and more valuable' until market prices recover. Historically, the value of forest land shows a very high correlation with inflation in the long term, making it an excellent place for large funds to 'hide' and preserve capital value. This is a trend observed worldwide, including in our region – the Baltics and the Nordic countries.