Retirement-fund investors from Australia, the U.K., and the Netherlands have recently come together to acquire Forico, the largest private forest-management company in Australia’s Tasmania state. UniSuper from Australia, the U.K.’s Pension Protection Fund, and the Netherlands’ APG Asset Management announced their joint acquisition of Forico and its 420,000-acre plantation forestry estate. Each investor will own a third of Forico and the estate.
The assets were acquired from a fund managed by New Forests, a global investment manager of nature-based real assets. Although the financial terms were not revealed, this acquisition marks a significant development in the forestry industry.
Situated on the island of Tasmania, the forestry estate is the largest freehold land estate in the state and is known for supplying sustainable hardwood for various purposes, including packaging and tissues. With its extensive productive area, the estate also owns critical infrastructure along the supply chain, such as processing mills and port access.
Sandra Lee, UniSuper’s Head of Private Markets, emphasized that forestry is not only a portfolio diversifier but also contributes to the global transition toward decarbonization through carbon storage and sustainable timber materials.
Furthermore, the estate plays a crucial role in reducing carbon dioxide levels. It currently sequesters over 123 million metric tons of CO2, and it is expected to remove an additional 24.7 million metric tons from the atmosphere during its current plantation rotation before harvest.
Hans-Martin Aerts, Head of Infrastructure and Natural Resources at APG Asset Management Asia, explained that investing in the forestry asset class allows for strong returns for pension fund clients like ABP while contributing to sustainable development goals, particularly in climate action.
This joint acquisition by retirement-fund investors underscores their commitment to responsible and sustainable investment strategies. The acquisition of Forico sets a remarkable precedent for the future of forest management and highlights the potential for lucrative returns from this underexplored asset class.