Field Notes: New Forests closes $130m Asia Forest Fund; Aleph Farms gets cultured beef approval in Israel; Scottish pension makes Nuveen timberland commitment

New Forests closes Asia Forest Fund on $130 million; Aleph Farms gets cultured beef approval in Israel; Scottish Border Council Pension makes Nuveen timberland commitment; Bain Capital’s partners invest in carbon credit platform, deals round-up, and more. Welcome to Field Notes, the start-of-the-week briefing for our valued subscribers only.

First look

Tropical rainforest

New Forests closes Asia Forest Fund

New Forests has reached a final close for the second iteration of its Tropical Asia Forest Fund series, a closed-end fund focused on investments in developing markets in Southeast Asia.

The firm raised $130 million – short of a previously-stated target of $300 million and less than the $170 million raised for TAFF1, which closed in 2012.

New Forests has been busy fundraising in other areas over the past 12 months, too.

The Sydney-headquartered asset manager held a first close for its Australia New Zealand Landscapes and Forestry Fund, the latest in its series of flagship funds focused on ANZ, on A$450 million in December 2023.

ANZLAFF is targeting A$600 million and investors who have already committed include the Clean Energy Finance Corporation (its first forestry investment, to the tune of A$75 million), Swedish pension fund AP2, German pension group Bayerische Versorgungskammer, and unnamed Australian and German insurance companies.

The firm has also begun divesting assets from its Australia and New Zealand Forestry Fund 2, a fund that closed on A$707 million in 2014.

Read the full coverage of TAFF2’s close here.

They said it

“Quite honestly, I think we see a very global effort to really minimize farming; to sort of squeeze it. They are hardly making any bones about it”

California State Representative James Gallagher discussed how his state’s farmers are under pressure from environmental regulations at the Land Investment Expo in Iowa

LP watch

Scottish pension makes Nuveen timberland commitment

The Scottish Border Council Pension Fund has made a commitment of an undisclosed size to Nuveen’s Global Timberland Fund.

A statement from Nuveen said it was the pension’s first allocation to natural capital. The asset manager did not close the current size of the open-end timberland fund, which launched in 2022.

Nuveen added that the SBCP is also looking at the potential of making further allocations to the asset managers suite of natural capital strategies, across both farmland and forestry.

“The pension fund’s core objective is to provide our end investors with stable returns and we are increasingly putting their capital to work to drive positive environmental and social outcomes,” said David Parker, chair of Scottish Borders Council Pension Fund.

SBCP is part of the national Local Government Pension Scheme and has assets of £900 million ($1.1 billion; €1 billion) under management with investments spanning across both traditional and now alternative asset classes.

Read the full story here.

ACCESS Pool seeks timberland manager for £300m allocation

The ACCESS Pool, which manages assets worth £35 billion on behalf of UK local government pension schemes, is looking for a timberland fund manager through which it can invest £300 million.

ACCESS intends to make two separate allocations, one of which will go to a core timberland strategy, with the other going to a timberland impact fund.

In January 2022, ACCESS appointed Apex Investment Advisory (formerly MJ Hudson before acquisition by Apex Group in May 2023) as implementation adviser for the pooling of illiquid assets including private equity, private debt, infrastructure, and real estate.

As implementation adviser, Apex Investment Advisory will provide support to the Pool in selecting individual investment opportunities and investment managers to build portfolios.

Deals

INVL branches out to Balkans

Lithuanian fund manager INVL Asset Management has broadened its forestry portfolio beyond its Baltic base to the Balkans, buying almost 1,400ha of Romanian forest.

INVL made the acquisition through its Sustainable Timberland and Farmland Fund II, which has raised €94 million to date while amassing more than 20,800ha of forest and land in Lithuania and Latvia.

STAFF II managing partner Martynas Samulionis said Romania is ripe for investment, especially as it prepares to join Europe’s Schengen Area, which is the group of EU countries without border controls between them.

“We’re constantly on the look-out for new acquisitions in countries with a stable regulatory environment and an attractive investment return,” he said.

INVL launched STAFF II in October 2020 with a target of €100 million and a €200 million hard-cap.

The fund held a fifth close on €90.7 million in May 2023.

LongRange backs Bakkavor

Stamford-based private equity firm LongRange Capital has acquired a 20.1 percent stake in LSE-listed food company Bakkavor from Boston-based investment manager The Baupost Group.

Financial details were not disclosed.

The stake was acquired through LongRange’s Capital Fund I and represents Baupost’s entire shareholding of 116,468,928 shares.

Bakkavor produces fresh prepared food including soups, sauces and salads for UK grocery stores and international food brands.

The firm reported revenue of £2.2 billion in 2023, a growth of 3 percent.

LongRange Capital managing partner Bob Berlin will rejoin the Bakkavor board as Baupost’s representative Patrick Cook steps down. Berlin previously held a position on the board from January 2016 to July 2018.

LongRange was established in 2019 and has more than $1.7 billion in assets under management.

Carbon

Mangrove forest

Bain Capital’s partners invest in carbon credit platform

Bain Capital Partnership Strategies, which invests the capital of the buyout firm’s partners, is funding newly launched carbon credits investment company Terra Natural Capital, reports affiliate title New Private Markets.

Terra finances nature-based carbon sequestration and energy efficiency projects with a view to generating carbon credits that can be sold on compliance and voluntary markets.

BCPS is now Terra’s largest shareholder, while Swiss multistrategy firm Pala Investments is a minority shareholder.

For BCPS, it is an “opportunity to invest in a platform that not only provides potential financial returns, but also plays a pivotal role in contributing to a high impact strategy to combat climate change”, managing director Michael Schor told affiliate title New Private Markets. BCPS also invests external capital.

Read the full story here.

Certified Carbon Credits signs 20-year Kenya deal

Certified Carbon Credits Limited signed a 20-year agreement with Kenya’s Mikoko Initiative to acquire and market the project’s blue carbon credits.

The Mikoko Initiative is a nationwide Kenyan project to restore mangroves and forestry across the east African country.

CCCL said the agreement will see the carbon marketer “manage a minimum of one million tonnes of carbon credits per year.”

President of CCCL Daniel Brody said in a statement: “Our collaboration with Mikoko Initiative marks a new era in sustainable development. By focusing on blue carbon projects, we aim to set a benchmark in the carbon credit market, ensuring environmental preservation and community support.”

Cultured meat

Cultivated beef on the menu in Israel

Cellular agriculture company Aleph Farms has become the first firm in the world to gain regulatory approval to sell cultivated beef.

The Israeli company’s beef steak product Aleph Cuts is also the first cultivated meat of any kind to gain approval in the Middle East.

Aleph Farms chief of regulatory affairs Yifat Gavriel said 2024 is set to be a breakthrough year for cultured meat, “opening the door for cellular agriculture to enhance food safety and food security”.

Aleph Farms – backed by investment firms Temasek, Clay Capital, and others – has submitted applications with authorities around the world including Switzerland and the UK.

Last year proved a milestone for cultivated meat, with US-based companies Eat Just and Upside Foods gaining approval to sell their cultivated chicken products in the US.

In 2020, Eat Just’s Good Meat became the first approved cultivated meat in the world when it got the green light in Singapore.

Farmland

Farmers in Germany continued their protests against fuel subsidy cuts by blockading roads in Berlin’s city centre.

More than 10,000 protesters are estimated to have taken part in the demonstration, which was supported by workers from other trades, all of whom are unhappy about higher living and business costs, and increased bureaucracy.

Similar protests have taken place in Belgium, France and the Netherlands in the last two years after governments cut diesel subsidies, imposed nitrogen emissions restrictions and higher land management taxes.

Meanwhile, the EU’s Nature Restoration Bill, which seeks to have restoration measures in place on at least 20 percent of the EU’s land, river and sea areas by 2030, has struggled to make its way through the European Parliament in the face of staunch resistance from the Agri and Fisheries Committees.

People

Finnfund, Finland’s development finance and impact investing body, has hired Hanna Loikkanen as its chief investment officer.

“Hanna has extensive experience in successfully financing private companies in emerging and transition markets,” said Finnfund chief executive Jaakko Kangasniemi.

“In addition to her operational experience, she has served on several company boards and is familiar with the issues relevant to impact investors and development financiers in our markets and regulatory environments. We are excited to have her unique combination of expertise and experience in our team.”

FinnFund has a long-standing history of making forestry and agriculture investments in emerging markets.

In 2020, the body partnered with OP Financial Group to launch the OP Finnfund Global Impact Fund I and in 2021, FinnFund backed New Forests’ sustainable forestry vehicle for sub-Saharan Africa alongside CDC Group and Norfund.

VC fundraising

Mediterranean Food Lab, an Israeli fermentation start-up, raised a $17 million Series A round led by Gullspång Re:food, with participation from PeakBridge, Arancia International and FoodBridge, among others.

Burro, an autonomous mobility company, raised a $24 million in Series B funding round co-led by Catalyst Investors and Translink Capital, with participation from S2G Ventures, Toyota Ventures, F-Prime Capital, and Cibus Capital.

SeeTree, an Israeli agtech company for permanent crops, raised a $17.5 million Series C funding co-led by HSBC Asset Management and the European Bank for Reconstruction and Development, with participation from OurCrowd and SmartAgro, among others.

Agrotoken, an Argentina-based digitisation start-up for trading grains, closed a $12.5 million pre-Series A round led by Bunge Ventures, with participation from Visa, Borderless Capital, Xperiment Ventures, and Newtopia VC.

Farm-ng, a California-based autonomous robotics developer for small farms, raised a $10 million Series A funding round led by Acre Venture Partners, with participation from Xplorer Capital and HawkTower, among others.

Also in the news…

PAI exploring options for $10bn Nestle ice cream JV

Froneri was created in 2016 when the Swiss company merged its European ice cream business with PAI-owned R&R. In 2019, Nestle sold its US ice cream operation to Froneri for $4 billion (Yahoo).

Entrepreneurial Equity Partners sells sausage and hot dogs maker Salm Partners

Johnsonville is a provider of sausages and other food products (PE Hub).

Brazilian agribusiness faces weather and macroeconomic risks in 2024

Brazilian agribusiness had a remarkable 2023 and achieved record production across crops including soybeans, corn, cotton, sugar can and more (Rabobank).

Michelle Ostermann appointed as CEO of The Pension Protection Fund

Michelle Ostermann is the chair of the International Centre for Pension Management and brings more than 30 years of experience to the role (PPF).

Commerzbank acquires infrastructure asset manager Aquila Capital

Aquila invests across assets such as infrastructure, renewable energy and land use and carbon forestry, among others (Aquila Capital).

Blue Earth Capital closes climate strategy closes $308m climate strategy

BlueEarth Climate Growth Fund I had a $300 million target and the firm took a further $70 million in co-investments (Blue Earth Capital).


Today’s letter was prepared by Binyamin Ali, Chris JaniecDaniel Kemp  and Tom Taylor