$400m forestry fund unveiled with focus on South-east Asia

Fund reflects rise in investor interest in forestry for returns, climate benefits

- David Fogarty

Japanese paper and packaging giant Oji Holdings and New Forests, a global investment manager focused on nature-based assets, announced on March 26 a US$300 million (S$401 million) fund to buy forestry estates, with the majority of the investment set to be in South-east Asia.

The open-ended fund will be a Singapore-registered Variable Capital Company (VCC) with the majority of the initial US$300 million investment to come from Oji Holdings, said Mr Geoffrey Seeto, New Forests' head of emerging markets, who oversees the firm's forestry investments in South-east Asia and Africa.

The fund is a reflection of increasing investor interest in forestry not only for stable returns from timber revenues but also for the climate, and increasingly biodiversity, benefits. Large timber concessions that have tracts of natural forest can also earn revenue from carbon credits by keeping the forests standing. Doing so can also help the host nation meet emissions reduction goals.

Sydney-based New Forests will manage the fund and help Oji Holdings identify the forestry assets, which can be existing plantations or sites to develop new ones.