Sydney-headquartered New Forests, a global investment manager of nature-based real assets and natural capital strategies, has announced raising A$450 million (about $300 million) in the first close of its Australia New Zealand Landscapes and Forestry Fund (ANZLAFF).
The fund, which secured commitments from institutional investors based in Australia and Europe, seeks to invest in core forestry plantations alongside processing and related infrastructure in Australia and New Zealand.
The fund has drawn commitments from Swedish pension fund Andra AP-fonden (AP2); German pension group Bayerische Versorgungskammer (BVK); the Australian Government’s Clean Energy Finance Corporation (CEFC); and an Australian and a German insurer.
New Forests, which was acquired by Japanese trading house Mitsui & Co and financial holding firm Nomura Holdings last year, seeks to raise A$600 million for the fund, with the target final close set for next year.
David Shelton, managing director of Australia and New Zealand, at New Forests, said the market is now seeing a shift from investing in narrow mandates around forestry and agriculture alone, to include a wider set of considerations and returns.
“Investors globally are now thinking about the role of forestry, agriculture and land use transition in not only delivering returns, but reducing emissions, contributing to conservation, and the circular bioeconomy,” he added.
ANZLAFF is New Forests’ fourth round Australia and New Zealand strategy, building on the experience of previous strategies, which collectively manage A$4.8 billion.
In Southeast Asia, the firm’s strategy offers access to growing regional timber demand and rising carbon markets, to generate climate, community and biodiversity outcomes. Last year, it announced the first close of its Southeast Asia-focused Tropical Asia Forest Fund 2, securing $120 million in capital commitments.
ANZLAFF, per the latest announcement, aims to maximise the value of the whole landscape by positioning investors to benefit from the best use of the landscape across forestry and agriculture, while combining additional revenue streams such as carbon, biodiversity, and renewable energy such as solar and wind, per the announcement.
By 2030, New Forests said it wants to see all capital allocations to forests and other land use invested in strategies that create climate-positive and nature-positive landscapes.
“We believe there is no credible pathway to net zero without investment in the forestry and land use sectors,” said.