International forestry investment manager New Forests announced the extension of its flagship forestry fund, the Australia New Zealand Forest Fund (ANZFF). Originally launched in 2010 as a 10-year, closed-end fund, ANZFF was converted into an extended long-term vehicle by agreement of the institutional investors in the fund. The extension includes a series of 12-year renewals, commencing 1 July 2020. Source: Timberbiz
“Over the past several years, we have worked closely with our ANZFF clients to develop an approach that enables them to continue to hold high-quality forestry and forestry-related assets for the long term, benefiting from cash yield and attractive markets. The structure we have developed lets New Forests work on our investors’ behalf to drive value into the future,” New Forests’ Managing Director for Australia and New Zealand, Mark Rogers said.
The ANZFF portfolio includes extensive, high-quality eucalyptus and pine plantations across Australia as well as the Timberlink wood products manufacturing and timber distribution business.
With a mature asset base, New Forests anticipates that ANZFF will generate ongoing cash yield from timber harvest and wood products sales as well as preserving and creating long-term value through managing biological growth and land assets for strong, stable total returns.
“We are heartened by our clients’ shared commitment to holding this portfolio, especially against the backdrop of many institutions needing to find liquidity in the current market. The ANZFF portfolio is among the premier diversified forestry portfolios globally. The fund extension endorses the contribution of forestry assets to our clients’ investment portfolios,” Mr Rogers said.
New Forests’ CEO David Brand said that the ANZFF portfolio was amalgamated after the disruption of the global financial crisis.
“That crisis had a huge impact on the Australian forestry sector, in particular the Managed Investment Scheme industry in the sector and major industry players. These assets have now been re-capitalised, upgraded, and placed under long-term institutional investor ownership. Australia’s forestry sector today is internationally competitive, profitable, and able to manage through the current Covid-19 crisis with limited disruption,” Mr Brand said.
The ANZFF estate includes approximately 283,000 gross hectares of land area, with around 195,000 hectares net planted area, and approximately 20,000 hectares dedicated to conservation management.
The portfolio generates approximately 4 million m3 of timber harvest each year and provides nearly 1500 jobs. All forestry areas are certified under the Forest Stewardship Council and Responsible Wood systems, providing third-party assurance of responsible forest management.
New Forests’ approach to asset management includes working with qualified local forest management businesses for on-ground operations, strengthening and diversifying market exposures and access, and emphasising rigorous and responsible investment management practices.
The ANZFF investors include pension funds, reinsurance companies, and sovereign wealth fund clients. Under the extended mandate, the ANZFF portfolio will be managed for long-term opportunities in a rising bioeconomy, focussed on helping to address the challenge of climate change and the supply of renewable resources.
“We are excited to enter a new phase of truly long-term partnership with our clients through the ANZFF extension. New Forests has always maintained a focus on meeting the needs of our clients,” Director of Investor Relations Sarah Clawson said.
“For investors in today’s competitive environment for quality real assets, we understand this may mean strategically keeping assets that can provide steady yield while also playing a diversification role within institutional portfolios.”