April 18, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

In early 2021, real asset-focused investment firm Astarte Capital Partners and Stockholm-based forestry development and management company SilviPar AB launched their inaugural Silvipar Astarte Impact Forestry Fund (“SAIFF”).

Under the terms of the partnership, Astarte Capital had committed US$30 million to the venture as seed capital, and SilviPar had committed assets valued at US$30 million. 

With an initial funding target set between US$150 million – $200 million, SAIFF acts to acquire, develop, and manage low-productivity farmland with limited alternative uses that are suitable for forestation. Capitalizing upon what the fund sees as the strong macro drivers, it plans to establish a sustainable, cost-efficient forestry portfolio to produce wood for the global fiber and pulp markets, while generating new credits for the carbon offset market.

Bringing its proven experience in building and growing businesses across private markets, Astarte is the investment advisor to the fund, responsible for operations and marketing, and SilviPar manages the portfolio, being responsible for the forestry strategy and day-to-day operations.

At the time, the partners noted that the global demand for natural fiber is expected to continue to increase. Indeed, the report Global Natural Fiber Composites Industry released in August 2020 concluded that the global market for Natural Fiber Composites is expected to reach a value of US$8.5 billion by 2025. 

Furthermore, in the ongoing shift toward net-zero emissions, forestry stands as a so-far largely untapped, but critical asset class. Although the macros are attractive, little did the partners know at the time just how much global traction this fund would have.

Now, Astarte and SilviPar have announced the final close of SAIFF at US$325.3 million – significantly oversubscribed above its initial target, having attracted investors from more than 25 countries across five continents – -to form a fund that is shaping up to be the largest and most diverse institutional capital pool ever created for deployment in Paraguay. 

“We are thrilled to announce the successful closure of our forest fund, significantly surpassing our target expectations!,” said Teresa Farmaki, co-founder and managing partner, Astarte Capital Partners. “This achievement reflects not only the confidence investors have placed in our vision but also their recognition for our strong commitments to environmental and social stewardship.”

Martin Forsen, chairman for SilviPar AB, agreed, saying, “We are delighted to announce the final closure of SAIFF, exceeding our anticipated targets. This achievement not only highlights the unwavering confidence our investors have shown in our objectives but also represents our shared commitment to environmental preservation and sustainable growth. In a world increasingly cognizant of the need for biodegradable and sustainable alternatives, wood emerges as the premier choice among biobased materials, poised to supplant conventional, fossil-based resources.”

At this closing size, SAIFF is targeting a portfolio of more than 80,000 hectares, the planting of approximately 60 million trees, and the creation of 3,000 direct and 30,000 indirect jobs in a part of the world with much to offer in terms of natural capital investment. 

Over its term, this portfolio aims to generate strong financial returns for investors combined with significant volumes of carbon removal estimated to be in excess of 18 million tons. And in alignment with the fund’s voluntary and legal sustainability commitments, more than 25 percent of the land will be permanently protected for conservation purposes, driving notable ecosystem benefits including the creation of what is today’s largest private grassland conservation park in the country of Paraguay. 

“Each dollar invested is being translated into tangible impact, supporting local communities, safeguarding biodiversity, and combating climate change,” said Farmaki. “We celebrate this achievement as an important milestone for our team as well as a powerful example of how sustainable investments can combine economic prosperity, ecosystem benefits and social equity.”

Forsen concluded, “By adhering to the highest international sustainability standards in forest and land management, we are not only nurturing local communities and preserving the environment but also cultivating one of the most competitive and sustainable products on a global scale.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News. She can be reached at lkiernan-stone@globalaginvesting.com.

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