Unisuper, PPF and APG have teamed up to buy a hardwood plantation in Tasmania and the forestry company that manages it
UniSuper, British pension fund Pension Protection Fund (PPF), and Dutch pension fund’s fully-owned asset manager APG Asset Management (APG) have acquired Tasmania’s largest private forest management company, Forico, and a 170,000-hectare plantation forestry estate in Tasmania, from a New Forests managed fund.
Under the agreement, the three investors will each own 33 per cent of Forico and the forestry estate. New Forests will be retained to provide investment management services.
“This adds further momentum to our growing private markets and forestry portfolios, as we continue to be on the lookout for quality investments that help our members grow their retirement savings over the long term,” Sandra Lee, Head of Private Markets at UniSuper, said.
“Not only is forestry a portfolio diversifier, but it also supports the global transition towards decarbonisation through carbon storage as well as substitution to sustainable timber material. We look forward to working closely with New Forests and our co-investors as we further develop this asset,” she said.
The New Forests forestry estate is one of Australia’s largest plantation hardwood estates by productive area and consists of vertically integrated assets and operations spanning approximately 90,000 hectares of productive plantation forest, the funds said in a media statement.
It also owns key infrastructure along the supply chain consisting of two wood processing mills, a seedling nursery, fibre technology laboratory, and port access via a freehold facility at Long Reach in Tasmania.
In 2013, a New Forests’ managed entity acquired the estate with co-investors, and over the past decade has worked closely with Forico to manage the asset.
According to Forico, the estate is sequestering more than 123 million tonnes of CO2e. The current plantation rotation is expected to remove from the atmosphere and sequester a further 24.7 million tonnes before it is harvested and replanted for another rotation.
In 2017, Forico became the first forest manager in Australia to win a contract to sell carbon credits to the Federal Government. Forico then received approval for a 10-year contract under the Federal Government’s Emissions Reduction Fund.
In December 2022, Forico also became the first forestry manager in Australia to achieve FSC® Ecosystem Services certification for its approach to protecting the biodiversity values across its estate.
The funds did not provide any financial details of the transaction.