SYDNEY – New Forests Pty Limited announces the close of the Australia New Zealand Forest Fund (“ANZFF”), an approximately AU$500 million fund that will invest in a diversified portfolio of timberland properties and forestry-related investments in Australia and New Zealand. The fund’s investors include international and regional institutional investors who have identified Australian and New Zealand timberland as an attractive component of their alternative asset portfolio allocation.
“Now is the right time for investors to be weighting toward the timberland asset class because of its low volatility and positive correlation to inflation,” David Brand, Managing Director of New Forests, said. “Australia and New Zealand’s timberland sectors are restructuring as a result of the failure of several forestry Managed Investment Scheme businesses in Australia and the flow on effects of the global financial crisis. This has created a once-in-a-generation change of ownership of the forestry and land asset base – which may be worth AU$3-4 billion – but the strong underlying market fundamentals of the sector remain, driven by growth in Asia.”
New Forests’ ANZFF will provide exposure to both domestic and export market opportunities in the region, including structural timber markets, pulp and paper and high value feature grade timbers. Investment returns may come from a variety of sources including timber, land leasing, capital appreciation, bio-energy products, limited processing facilities and environmental credit production, such as carbon credits. All assets will be managed on an environmentally and socially sustainable basis to deliver or enhance returns and/or to reduce risk.
Timberland Investment in Australia and New Zealand
Global timberland investment has grown significantly over the past 20 years with current estimates of institutional investment up to US$50 billion. It has been a particularly attractive asset class for institutional investors and investors willing to accept lower liquidity in return for a premium equity return and portfolio diversification benefits. While the majority of timberland investments are currently in U.S. assets, ANZFF supports the growing trend toward international diversification and provides access to new growth opportunities borne from the current market conditions in Australia and New Zealand, and the proximity to expanding demand in Asia.
“A long history of high quality forest management, well established infrastructure and skilled labour make for an attractive investment environment in Australia and New Zealand,” David Shelton, Director of Investment Programs, said. “International investors are also attracted to Australia due to the robust economy and beneficial tax laws, which reduce tax rates for international investors compared to many other investment destinations.”
New Forests Fund Management
ANZFF is New Forests’ first branded timber fund in the Australia-New Zealand region, and the company has attracted marquee institutional investors from Europe, North America and Australia. New Forests currently co-manages an eco products fund, focused on carbon and biodiversity investments primarily in the US, and executes on investment strategies related to sustainable forestry in the Asia Pacific region.
New Forests provides the full value chain of investment services, from fund management to operational oversight of forest management and accreditation of forest assets and eco products. Staff skills span business and finance, timberland investment, operational forestry, policy and market research. In July, the Australian Securities and Investments Commission granted New Forests an expanded Australian Financial Services Licence (“AFSL”) enhancing the company’s authorisations to provide financial advice and products. New Forests also recently became a signatory to the UN’s Principles for Responsible Investment and aims to report on its progress toward implementing the Principles in 2011.
About New Forests
New Forests (www.newforests.com.au) is an investment management firm specialised in timberland and associated eco products, such as carbon, biodiversity and water. The company offers investment strategies across sustainable forestry in Australia and New Zealand (the Australia New Zealand Forest Fund), sustainable forestry in Asia and emerging ecosystem services markets (the Eco Products Fund) to institutional and private equity clients. New Forests is headquartered in Sydney, Australia, with staff in New Zealand, Washington, D.C., San Francisco, Indonesia and Kota Kinabalu, Malaysia.