UniSuper, one of Australia’s largest superannuation funds, is among a consortium of companies that have secured Forico, a 170,000-hectare plantation forestry estate in Tasmania, from a New Forests managed fund.
The consortium’s buy-out, which includes the U.K.’s Pension Protection Fund (PPF) and APG Asset Management N.V. (APG) on behalf of its Dutch pension fund client ABP, will see New Forests remain as investment manager of the asset.
New Forests is the world’s largest investment manager in forest markets, with more than $10 billion in funds under management.
Forico is one of Australia’s largest plantation hardwood estates by productive area and consists of vertically integrated assets and operations spanning 90,000 hectares of plantation forests.
Wood Central can report that it also owns key infrastructure along the supply chain, including two wood processing mills, a seedling nursery, and a fibre technology laboratory.
It also has port access via a freehold facility at Long Reach, Tasmania.
The estate is the largest freehold land estate in Tasmania and is a pivotal contributor to the supply of sustainable hardwood domestically and abroad for end uses such as packaging and tissues.
Under the ownership structure, the three investors share 33% of Forico and the forestry estate. In 2013, a New Forests’ managed entity acquired the estate with co-investors, and over the past decade, has transformed the estate.
In total, Forico has sequestered more than 123 million tonnes of CO2e, and its commitment to natural capital and sustainable reporting has been recognised internationally, including the ‘Embedding an Integrated Approach’ at the ‘Finance for the Future Awards’ in London last year.
The current plantation rotation will sequester 24.7 million tonnes before it is harvested and replanted for another rotation.
In July, Wood Central reported that Forico was working “side by side” with researchers from the University of Tasmania on world-leading research into the adaptability of Tasmanian devils with devil facial tumour disease.
The sites include a population of Tasmanian devils where DFTD has been monitored at three-month intervals since the beginning of the epidemic outbreak in 2006.
In 2020, Dr Rodrigo Hamede spoke to Forico about the study and the importance of plantation access to establish long-term field sites.
“This has been vital for finding new research priorities and developing conservation strategies to protect the species from the devasting effects of DFTD.”
Last December, Forico became the first forestry manager in Australia to achieve FSC Ecosystem Services certification for its approach to protecting the biodiversity values across its estate.
“We are delighted to be investing in an asset of this scale and quality,” said Sandra Lee, head of private markets at UniSuper.
“This adds further momentum to our growing private markets and forestry portfolios as we continue to look for quality investments that help our members grow their retirement savings over the long term,” Ms Lee said.
“Not only is forestry a portfolio diversifier, but it also supports the global transition towards decarbonisation through carbon storage and substitution to sustainable timber material.”
According to Hans-Martin Aerts, Head of Infrastructure and Natural Resources at APG Asset, investment in the forestry asset class provides an “opportunity to deliver strong returns for our pension fund client ABP and participants.”
“Whilst contribution to sustainable development goals around climate action, improving livelihoods and sustainably managing land.”
“Everyone wins,” according to Alex Leonard, the Head of Infrastructure, Timberland & Farmland at the Pension Protection Fund (PPF) – with forestry representing an important asset class for the pension fund underpinned by a commitment to responsible investment.
“Our focus on using our funds in these longer-term productive investments, in both U.K. and global markets, is important for sustainable growth and productivity,” Mr Leonard said.
“We are particularly attracted to the strong growth prospects for hardwood fibre and Forico’s position at the forefront of advances in silviculture, the circular bioeconomy and natural capital.”
According to Ange Albertini, CEO of Forico, “attracting and retaining long-term investment partners in UniSuper, PPF, and APG helps to secure a prosperous future for Forico and the forestry industry.”
“It will allow us to continue to innovate, adopt market-leading practices, and look at ways to add value to the natural environment.”
For Mark Rogers, who replaced David Brand as CEO of New Forests earlier this year, the investment manager has a long history with the asset “and is delighted to bring together like-minded, long-term partners to support the future of forestry in Australia.”
Mr Rogers, who will remain Chair of New Forests, looks forward to finding “ways to add further value, harnessing the growth in the circular bioeconomy, carbon projects, natural capital and biodiversity markets.”