May 23, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Mitsui and Nomura have agreed to acquire New Forests, the second largest forestry investment manager in the world and the largest in the timber and plantation sectors in Asia-Pacific. Financial details are not being disclosed at this time, however, the transaction is expected to close in December 2022. 

Headquartered in Sydney since its inception in 2005, New Forests is a certified B corporation with operations in Australia, New Zealand, Southeast Asia, and the U.S. that offers high-impact strategies in sustainable forestry and its related sectors.

To-date, the group holds a portfolio with A$7.8 billion (US$5.8 billion) in AUM across more than 1.1 million hectares of investments consisting of sustainable forest plantations, areas of natural forest conservation, carbon projects, row cropping, and timber processing.

Since last summer, New Forests has been rather busy, acquiring 156,000 acres in the Hilt-Siskyou Forest; then acquiring Lawson Grains; developing a A$50M carbon offset fund with Mitsui; and partnering with CDC Group, Finfund, and Norfund on a $500 million forestry investment scheme in sub-Saharan Africa. And most recently, in March of this year, announced a first close at $120 million for its Tropical Asia Forest Fund 2 (TAFF2) backed by a cadre of investors including sovereign wealth, corporate, philanthropic, and development finance capital from Australia, Europe, Japan, the Philippines, Singapore, and the U.S.

With an office in Singapore, and a mission “to see investment in land use and forestry as central to the transition to a sustainable future”, TAFF 2 is New Forests’ second fund dedicated to sustainable forestry opportunities in Southeast Asia, following the close of its Tropical Asia Forest Fund (TAFF) in 2013. 

Mitsui and Nomura share in this mission that also includes addressing climate change, the conservation of nature, supporting the shift to a circular bioeconomy, and contributing to the local communities where New Forests operates.

Through this partnership, Mitsui and Nomura will provide capital that will support New Forests’ strategic growth initiatives and global expansion plans. In turn, New Forests will leverage Nomura’s global distribution network, particularly across Japan and more widely across Asia.

Yoshihiro Namura, senior managing director, head of investment management division at Nomura, said, “We have been impressed with New Forests’ leadership and track record in sustainable forestry and land use and see New Forests’ approach to climate change being complementary to Nomura’s business. As a large global financial services group, we play a significant role in helping to solve environmental challenges, and we see investment in sustainable land use and forestry as a key part of the solution.”

Under the agreement, through which Mitsui and Nomura will purchase 100 percent shareholding of New Forests, Mitsui, which has been a shareholder in New forests since 2016, will increase its holding from 23 percent to a 49 percent stake, Nomura will hold 41 percent, and the remaining 10 percent will be retained by New Forests’ staff.

“Mitsui’s investment in New Forests is part of our sustainability strategy to invest in companies who are at the forefront of climate change mitigation and who are positively contributing to communities,” said Hiroshi Kakiuchi, managing officer, chief operating officer, performance materials business unit at Mitsui. “We are looking forward to our continued partnership with New Forests and supporting its next stage of growth.”

Upon closing of the transaction, two representatives each from Mitsui and Nomura will join the New Forests Board of Directors, along with two independent directors and an employee nominee director.

Likewise, David Brand, CEO and chairman of New Forests, will continue in place until June 30, 2025 with a focus on strategic initiatives and growth opportunities.

“New Forests has achieved a great deal over the past 17 years, growing institutional investment in the forestry asset class and re-imagining the investment opportunities in rural landscapes,” said Brand.

“The rising need to substantially increase investment in sustainable land use, along with increasing investor interest is creating an opportunity to accelerate the growth of New Forests,” he continued. “I am delighted to have found two partners in Mitsui and Nomura who share in our vision and will provide us the support to further scale our business and provide new opportunities for our clients, stakeholders and our 100 staff.”

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

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