Tropical Forest Fund targets $100m

New Forests Asset Management's latest vehicle will invest in forestry-related assets in the Solomon Islands, Indonesia, Malaysia, Vietnam and the Philippines.

Sydney-headquartered New Forests Asset Management has started fundraising for Tropical Forest Fund, which is targeting a $100 million final close by February 2010.

Tropical Forest Fund will make equity and equity-related investments in natural forests, timber plantations and other forestry-related assets in the Solomon Islands, Indonesia, Malaysia, Vietnam and the Philippines. The fund may also invest in other countries of the South Pacific.

The firm hopes to have an initial close on the fund in September, Maree Candish, director of New Forests Asia and head of the Tropical Forest Fund, said in an interview.

Forrests: private equity target

The International Finance Corporation (IFC), the World Bank’s private investment arm, is considering an investment of up to $20 million, or 20 percent of the fund’s size.

Tropical Forest Fund will deploy between 50 percent and 80 percent of its capital in existing forestry assets and plantations and the remainder in greenfield plantations, IFC’s website said. Its primary revenues are expected through the sale of tropical timbers and latex. It will also seek to generate revenue from investments in procession facilities, carbon credits and natural forest management, according to IFC.

The firm has a full pipeline of deals with many of them under exclusivity, Candish said.

New Forests Asset Management currently manages assets worth about $170 million in Australia, New Zealand, Hawaii and the Solomon Islands. The firm also co-manages the $100 million Eco Products Fund, a private equity fund focused on investments primarily in North America.

Established in 2005, the firm is a spin-out from Hancock Natural Resource Group, one of the world’s largest timberland investment managers. Tropical Forest Fund is managed out of Sydney, Australia and Kota Kinabalu, Malaysia.