New Forests, a Sydney-based real assets investment manager offering strategies in forestry, land management and conservation, has teamed up with British International Investment, Norfund and Finnfund to invest US$200 million in a dedicated African fund, the African Forestry Impact Platform (AFIP).

The new entity also announced its first acquisition – Green Resources, East Africa’s largest forest development and wood processing company managing approximately 38,000 hectares of pine and eucalyptus plantations in Tanzania, Uganda and Mozambique. The acquisition is subject to regulatory approval (in Tanzania) and is expected to be completed by December 2022. 

AFIP has been registered in Singapore as a variable capital company (VCC), which is an open-ended, permanent capital vehicle. Through this arrangement, AFIP will continue to raise long-term institutional capital and aims to grow the fund to US$500 million to invest in Africa’s growing forestry sector.

The new fund plans to invest in a portfolio of plantation forestry operating companies and related assets in Sub-Saharan Africa.

It will primarily target established assets that can be expected to provide stable and predictable cash flows across a diversified set of markets, which will also perpetuate sustainable landscapes that balance both conservation and production with social inclusivity and environmental protection.

Drawing on New Forests’ approach to sustainability, AFIP will focus on four key areas of impact – climate mitigation, biodiversity conservation, gender and diversity, and community and livelihoods.

With US$6.5 billion in assets under management, New Forests manages a diversified portfolio of sustainable timber plantations and conservation areas.

The company has had a presence in Nairobi since 2021, and in June that year appointed Paul Ohaga, senior director, Africa, to lead the business.   

Commenting on the new dedicated African fund, New Forests chief executive officer David Brand says: “Africa has growing economies and rising timber demand but is also home to some of the world’s most biodiverse forests. New Forests’ new Africa platform will expand the plantation forest sector while seeking to also support forest conservation, restoration of degraded land and expansion of community-based forestry programs.”

The deal is the first since Mitsui & Co. and Nomura Holdings agreed to acquire New Forests in May this year. Mitsui is taking a 49% stake of the company and Nomura will acquire a 41% interest, with the remaining 10% stake retained by New Forests staff.