#USA #Boston #Manulife #Timberland #Forest Climate Fund

Manulife Investment Management Closes $480 Million Forest Climate Fund

In an important step towards battling climate change, Manulife Investment Management has successfully closed its Forest Climate Fund LP with a total of $480.1 million in financial commitments. The fund has attracted a diverse set of investors including U.S. corporates and multinationals keen on supporting sustainable environmental practices. This move solidifies Manulife's status as a leading timberland investment manager, overseeing more than five million acres of managed land globally.

Objective of the Fund

The Manulife Forest Climate Fund is designed to enable investors to engage in the ownership of sustainably managed forestland where carbon sequestration stands out as the primary value focus. The strategic aim is to sequester over 6 million tons of carbon dioxide during its operational term. Investors in the fund can also anticipate generating high-quality carbon credits, which reinforces the financial viability of carbon offset projects while ensuring a sustainable approach toward environmental conservation.

According to Tom Sarno, the global head of timberland investments at Manulife, the interest expressed in the fund from global investors showcases an increasing acceptance of forests as viable tools for climate change mitigation and offers a fresh direction in timberland investment.

Investment Strategy and Acquisitions

With its acquisitions already underway, the fund has begun to establish a diversified portfolio that supports its mission. To date, it has secured over 150,000 acres and is nearing 50% deployment of its assets. The initial investment, named Eagle Cap, is situated in the northeast of Oregon and southeastern Washington. This property was primarily selected to generate a steady cash flow from sustainable forestry activities while promoting land conservation through a partnership, exemplified by the sale of 1,072 acres to ensure public access.

Another key acquisition, known as Siscowet, lies in Michigan's upper peninsula and has a rich history of timber production, enabling the fund to leverage its existing timber inventory to generate carbon credits efficiently. Similarly, the most recent acquisition termed Oak Bluff spans across counties in Mississippi, Louisiana, and Arkansas, where it is positioned for both carbon credit generation and sustainable timber yields.

As emphasized by Eric Cooperstrom, the managing director of impact investing at Manulife, there is a robust confidence among investors in forests as premier natural solutions to climate challenges. The aim is to continually seek natural climate solutions that open new avenues for impactful results for clients.

Broader Context

Manulife’s commitment to environmental sustainability extends through its wider $100 billion diversified private markets platform, which encompasses various asset classes including infrastructure, real estate, and agriculture. This commitment ensures that both institutional and retail investors have access to diverse solutions tailored to meet long-term investment goals.

In conclusion, the successful closure of the Forest Climate Fund not only reinforces the growing acceptance of timberland investments but also showcases the dedication of Manulife Investment Management towards innovative climate solutions, ultimately addressing both environmental needs and financial viability for investors.