August 19, 2024

By Gerelyn Terzo, Global AgInvesting Media

Stafford Capital Partners, an investment firm with $8.1 billion in AUM and global locations including Austin and London, has closed on a pair of deals for its carbon offsets fund. The investments, the first of their kind for the Stafford Carbon Offsets Opportunities Fund, are worth more than $70 million combined and will be directed into parcels of land located in Brazil and New Zealand. Stafford’s carbon offsets fund, which was launched at year-end 2022 with a fundraising target of $1 billion, reached a first close in early 2023 with $242 million in investor commitments.

The New Zealand acquisition comprises a $12 million investment in a trio of properties across 1,914 hectares (4,729 acres). Considering that most of the land is lower quality, Stafford describes it as ideal for grazing or forestry. Stafford plans to plant 1,356 hectares (3,350 acres) with radiata pine, while the balance of the area will be maintained with conservation objectives.

Stafford is targeting a high yield of carbon offsets of 45,000 tons per $1 million invested. There’s also an opportunity for the firm to purchase another 10,000 hectares (24,710 acres) of land, positioning the property for greater potential growth.

The second investment represents a $60 million commitment to purchase degraded pastureland in southwestern Brazil, where landowners are required by law to protect at least 20 percent of their land. Stafford plans to develop commercial timber plantations on half of the property, with the balance of the land reserved for protecting and restoring the natural forest. As for the commercial plantations, they will be run on an “extended rotation to produce sawlogs, underpinning the long-term financial viability of the project and building a resource that can help meet growing wood demand in a sustainable manner,” per the announcement.

Stafford’s CEO Angus Whiteley stated, “Institutional investors appetite for investible climate solutions is only growing in the context of the race to Net Zero. The carbon sequestering properties of timber, the world’s only climate-friendly building product, are compelling. Those deploying capital into timber will enjoy a first mover advantage as Net Zero deadlines loom and supply constraints of high-quality carbon removals and sustainable timber products start to have to an impact.”

Stafford has been investing in sustainably managed timberland plantations for over two decades and has recognized the important role of forestry in combating climate change. The carbon offset fund’s strategy will target investments in afforestation, natural forest restoration and improved forest management projects around the world.

Meanwhile, Stafford was recently selected for two timberland mandates by UK Local Government Pension Scheme (LGPS) pool Access, one of which, a global core timberland offering, will be managed alongside J.P. Morgan Asset Management for a combined starting mandate size of £300 million (US$388.4 million). Access revealed that the fresh investments originated from pension schemes that previously did not have allocations to timber, an indication of the growing interest in sustainably managed timberland.

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