David Shelton Managing Director Australia and New Zealand, New Forests
New Forests, a global investment manager of nature-based real assets and natural capital strategies, has announced the first close of the Australia New Zealand Landscapes and Forestry Fund (ANZLAFF), raising approximately $450 million from institutional investors from Australia and Europe. Source: Timberbiz
Investors in the first close include Swedish pension fund Andra AP-fonden (AP2); German pension group Bayerische Versorgungskammer (BVK); the Australian Government’s Clean Energy Finance Corporation (CEFC); along with an Australian and a German insurer, as part of an overall fund raise targeting $600 million over the next year.
The Clean Energy Finance Corporation has committed $75 million to the fund however it says the fund will not harvest native forests and will ensure that all its forestry operations are compliant with the highest globally recognised sustainability standards..
ANZLAFF aims to provide investment exposure to 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 exposure to agriculture.
“As Australia steps up its efforts to reach net zero emissions by 2050, we must tackle those sectors where the emissions challenge is greatest and capitalise on our competitive advantages, including our abundant and rich natural capital assets,” CEFC CEO Ian Learmonth said.
“This milestone CEFC investment commitment mobilises the forestry sector to help unlock the supply of carbon credits and accelerate carbon sequestration opportunities, ensuring we make the best use of our land as we decarbonise our economy.”
The Fund 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.
“Since New Forests launched its first fund 13 years ago, the market is now seeing a clear shift from investing in narrow mandates around forestry and agriculture alone, to include a wider set of considerations and returns,” David Shelton, Managing Director, Australia and New Zealand at New Forests said.
“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.”
In addition to attractive returns, the Fund has set other targets including carbon abatement through the establishment of new greenfield plantations and the conversion of existing plantations from hardwood (short rotations) to softwood (long rotations) in Australia.
“Natural capital assets offer significant opportunities to contribute to the decarbonisation pathway for Australia and to build competitive new industries for our net zero future,” Heechung Sung, Clean Energy Finance Corporation (CEFC) Head of Natural Capital said.
“These require a long-term investment focus. The sooner we act, the greater the economic benefit and the more opportunity we have to mitigate the worst effects of climate change,” she said.
“We are pleased to work with an experienced global manager in the forestry sector to target the ambitious carbon sequestration and sustainability measures through this investment, which is part of our broader drive into natural capital.”
