June 27, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

New Forests, a global investment manager of nature-based real asset and natural capital strategies, has acquired the 19,000-acre (7,654-hectare) McCloud Forest in the Mount Shasta region of California.

This transaction marks the first for New Forests’ Forest Climate Solutions Fund (FCS), which seeks to generate dual channels of returns from both timber and carbon credits developed and sold in the California-regulated carbon market. 

This asset is also located adjacent to two existing investments being managed by New Forests, providing the benefits of economies of scale, an established local presence, and existing access to operating domestic processing facilities. 

Headquartered in Sydney since its inception in 2005, New Forests is a certified B corporation with operations in Australia, New Zealand, Southeast Asia, Africa, and the U.S. that offers high-impact strategies in sustainable forestry, natural capital, agriculture, and their related sectors – investments that the firm sees as central to the transition to a sustainable future. 

The firm manages a diversified portfolio of sustainable timber plantations and conservation areas, carbon and conservation finance projects, agriculture, timber processing, and infrastructure with US$7.3 billion in AUM across more than 3.14 million acres (1.2 million hectares) of investments. 

New Forests explained that these strategies support the role of forests as nature-based solutions able to provide sustainable wood fiber for the expanding circular bioeconomy while contributing to the development of regional and rural economies and communities in a sustainable way. 

As the first investment through FCS, McCloud Forest consists of mixed conifers including true fir, Douglas fir, and ponderosa pine, and poses a significant opportunity for timber revenue combined with the potential for the integration of a carbon project. 

Over time, New Forests explained that they expect to adjust the harvest activities across the asset to improve forest cover, enhance the overall forest health and resiliency, and to improve wildlife habitat.

The manager also noted it will explore environmental opportunities, such as conservation easements and valuation of ecosystem services, to further achieve positive impact outcomes alongside financial returns. 

“We will be applying our sustainability approach to this asset, and over time intend to adjust harvest activities to allow trees to grow for longer, capture more carbon, and process a higher percentage of the wood into more sustainable solid wood products,” said Jeff Briggs, managing director, New Forests United States. 

New Forests was one of the first forestry companies to develop carbon credits through California’s cap-and-trade system, and has since developed more than 20 million first carbon offset credits. 

The firm expects that this McCloud asset will generate significant income from the development of a carbon offset project under the California ARB compliance protocol. This income, combined with ongoing management of the asset for timber production, is projected to drive attractive returns. 

Briggs concluded, “The McCloud Forest is a quality asset with solid returns from timber revenue and the potential upside from carbon and other ecosystem values.”

~ 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, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

*The content put forth by Global AgInvesting News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. Global AgInvesting and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.