ABP and UK Pension Protection Fund make NZ timberland investment

The two European pensions have acquired a controlling stake in Wenita Forest Products, with their investments to be managed by Sydney-headquartered New Forests.

A majority stake in a major softwood plantation asset in New Zealand has been acquired by two European pension funds: APG Asset Management on behalf of Dutch pension fund ABP, and the UK’s Pension Protection Fund.

The two pensions have bought a combined 62 percent stake in Wenita Forest Products Limited, the largest producer of timber in Otago, New Zealand, with almost 30,000 hectares of sustainably managed forests.

The investments will be managed by Sydney-based asset manager New Forests. The GP’s Australia New Zealand Forest Fund 2 has owned the other 38 percent shareholding since 2018, meaning the purchase brings total management of the Wenita asset under New Forests.

The value of the deal was not disclosed and New Forests declined to comment on commercial terms.

Lea Dubourg-Hrachovec, head of infrastructure, timberland and farmland at the Pension Protection Fund said the deal was the fourth addition to its “growing program of direct investments into sustainable, FSC-certified forestry assets globally.”

“What attracted us to Wenita is its long-established operational track record, mature, high quality forest portfolio with a close proximity to the deep-sea port of Chalmers, which makes it a very highly prized forestry asset in New Zealand. We believe Wenita has a great long-term potential and we’re very excited to be part of its future alongside our partners APG and New Forests,” she said in a statement.

New Forests’ ANZFF2 is a 10-year closed-end fund that closed on A$707 million in 2014. It reached full deployment in 2018 following the fund’s acquisition of its stake in Wenita, as well as full ownership of the Otago Land Company. Otago Land Company holds 22,500 hectares of freehold land on which Wenita operates via forestry rights.

Both assets were acquired from The Rohatyn Group, an asset management firm, for an undisclosed amount.

In 2020, New Forests converted its $490 million first Australia New Zealand Forest Fund from a 10-year closed-end structure into a semi-permanent vehicle with rolling 12-year renewal periods.

Its successor fund, Australia New Zealand Forest Fund 3, closed on A$873 million in 2018.

The fund significantly expanded its presence in non-timber assets this year with the purchase of the Lawson Grains broadacre cropping portfolio in Australia from Macquarie Asset Management, alongside Alberta Investment Management Corporation.