By Gerelyn Terzo, Global AgInvesting Media
New Forests, a Sydney, Australia-based global investment manager specializing in nature-based real assets and natural capital strategies, has introduced a new fund. Through a partnership with pulp and paper manufacturer Oji Holdings, New Forests has launched the Future Forest Innovations Fund, a corporate forest investment vehicle designed to catapult the firm closer to reaching its 2030 environmental goals. New Forests and Oji have a long history of deals in the forestry space and discussions for the most recent dedicated strategy have unfolded in recent months.
GAI News has learned that New Forests CEO Mark Rogers and Head of Emerging Markets Geoffrey Seeto are currently in Tokyo with the Oji team for a signing ceremony.
The fund, which was registered as an open-ended Variable Capital Company (VCC) in Singapore, has received a capital injection of $300 million from Oji Holdings alongside a co-investment from New Forests, the latter of which boasts A$11.7 billion (US$7.3 billion) in assets under management. New Forests is also able to accept new and other investors due to the open nature of the fund, which will reportedly target returns of 10 percent-12 percent.
The Future Forest Innovations Fund will target productive plantation forestry assets located across Southeast Asia, North America, Latin America and Africa with a two-pronged strategy for financial returns and climate benefits. Oji said it is looking to capture “an additional 1.5m tCO2e per annum of net sequestration by 2030 from the forestry assets it acquires,” according to the announcement.
Of its latest fund launch, New Forests CEO Mark Rogers stated, “We are continuing to see momentum and interest from corporates looking to invest in forestry and the natural capital asset class. By investing in sustainable forest plantations in four major regions of the world, we will be assisting Oji to achieve their 2030 mission of growing their sustainable forestry assets and reducing overall carbon emissions.”
As a major pulp and paper manufacturer, Oji Holdings has already invested in 635,000 hectares (1.6 million acres) of forestland and is looking to bolster its portfolio by 70,000 hectares (172,973.7 acres) of plantation forests – including both greenfield and brownfield assets – through this partnership with New Forests.
Earlier this year, New Forests achieved the final close of its Australia New Zealand Landscapes and Forestry Fund with roughly A$600 million (US$375.4 million) from institutional investors from across Europe and Asia-Pacific. That fund strategy involves “Integrated forest, land, carbon and agriculture markets in Australia and New Zealand targeting investments in core forestry plantations alongside processing and related infrastructure, with some targeted exposure to agriculture assets,” per the company.
Investors including pension funds and insurance companies have been flocking to timber assets of late. In recent weeks, Stafford Capital Partners revealed it attracted over $1.1 billion in a record haul for its massive timber fund, the tenth of its kind for the firm. Timber funds provide investors exposure to the forestry industry, giving them a way to add diversification to their portfolios, generating returns by harvesting and selling wood products like timber. For its part, New Forests will harness its 20-year history managing forests in a sustainable way for the new fund.
Oji commented, “Through the operation of this fund, we will combine the diverse expertise of New Forests, an expert in forest management, with our own forest management technologies. We aim to develop products that use wood resources and contribute to the realization of a sustainable society.”
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