New Forests hits full deployment on A$707m antipodean fund

The trans-Tasman manager has sealed the two final deals funded through the vehicle by purchasing two assets from The Rohatyn Group.

Forestry investment manager New Forests has made two acquisitions to complete the deployment of its A$707 million ($527.41 million; €449.03 million) Australia New Zealand Forest Fund 2 (ANFF2).

New Forests acquired 38 percent of Wenita Forest Products as well as full ownership of the Otago Land Company to complete the full investment of the fund. New Forests declined to disclose the value of the two transactions. Both assets were acquired from The Rohatyn Group, an asset management firm.

Wenita is the largest softwood timber producer in New Zealand’s Otago region with a 29,200-hectare estate growing primarily radiata pine (pictured). Otago Land Company holds 22,500 hectares of freehold land on which Wenita operates via forestry rights.

ANFF2 is a 10-year closed-ended fund with the possibility of extension that held its final close in 2014 and began investing that year, first with hardwood acquisitions in Australia. These included the purchase of assets in Tasmania previously owned by defunct timber company Gunns and the launch of the Forico business to manage them in 2014. The fund made its first New Zealand purchases in 2015.

The manager is now working on investments for ANZFF3, also a closed-ended fund, and has already made investments in New Zealand, according to a spokeswoman for the firm.

“New Forests has been selective and disciplined in creating the ANZFF2 portfolio,” said Mark Rogers, managing director for the manager’s Australia-New Zealand business. “The Wenita acquisition complements the fund’s hardwood and softwood plantation exposure in Australia and brings our New Zealand estate to more than 48,000 hectares in total.”

The Rohatyn Group partner Ian Jolly said the Wenita estate was “depleted, had very high operating costs and relatively poor yields” when the firm first acquired it. “During our ownership,” he added, “inventory has recovered, yields are greatly improved, and operating costs have reduced dramatically as harvesting is now in the second rotation. We are delighted to deliver a strong realized return from this investment to our clients.”

In total, New Forests manages approximately A$4.5 billion in assets and funds under management, including more than 940,000 hectares of forests, land, and conservation investments in Australia, New Zealand, Southeast Asia, and the US.

Agri Investor reported in March that the firm’s Tropical Asia Forest Fund was nearing full deployment after injecting additional equity into a Malaysian eucalyptus plantation.