Australian Fund Acquires Tasmanian Forest and Management Company

Australian superannuation fund UniSuper, the UK’s Pension Protection Fund (PPF), and APG Asset Management N.V (APG) on behalf of its Dutch pension fund client ABP, have announced the acquisition of Forico and a 170,000-hectare plantation forestry estate in Tasmania, from a New Forests managed fund.

Forico is Tasmania’s largest private forest management company. The 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.

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, Tasmania.

The estate is the largest freehold land estate in Tasmania and a key contributor to the supply of sustainable hardwood domestically and abroad for end uses such as packaging and tissues.

Under the agreement, the three investors will each own 33% of Forico and the forestry estate. New Forests will be retained to provide investment management services.

In 2013, a New Forests’ managed entity acquired the estate with co-investors, and over the past decade, working closely with Forico has helped to transform the asset into what is today one of Australia’s leading sustainable timber producers.

Forico’s market-leading approach to valuing natural capital and sustainability reporting has demonstrated that 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 December 2022, 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.

Sandra Lee, Head of Private Markets at UniSuper commented, “We’re delighted to be investing in an asset of this scale and quality. 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.” 

Mark Rogers, Chief Executive Officer, of New Forests and Chair of Forico said, “We have a long history with this asset in Tasmania and are delighted to bring together like-minded, long-term partners to support the future of forestry in Australia.  We’ll be looking at ways to add further value, harnessing the growth in the circular bioeconomy, carbon projects, natural capital, and biodiversity markets.”