Asian forestry fund fully invested, follow-on vehicle planned

Tropical Asia Forest Fund (TAFF), managed by Sydney-based New Forests, has made its final investment, acquiring a majority shareholding in one of the largest hardwood plantation estates in Laos.

The fund, which raised US$170m (€160m) in 2013, has now invested in plantations in Laos, Malaysia and Indonesia.

With the fund fully invested, New Forests expects to launch a second fund in September.

David Brand, New Forests CEO, told IPE Real Estate that TAFF has raised its stake to 85% in a Lao business known as Mekong Timber Plantation. The balance is held by the Lao Government.

TAFF manages capital commitments from nine investors, including pension and superannuation funds.

It is the only institutional forestry fund dedicated to investing in sustainably-managed timber plantations in Southeast Asia.

New Forests is raising capital for its Australian New Zealand Fund 3, which is due to close in July. It secured AUD660m (€468m) in its first close in November 2016.

New Forests was founded in 2005. It manages more than AUD3.6 billion in funds, with assets located in Asia Pacific and the US.

“Our Lao plantation will be cash-flow positive in two to three years,” Brand said, adding that eucalyptus trees planted in the 1990s are largely mature now.

By comparison, TAFF plantations in Malaysia and Indonesia are cash-flow negative and will require ongoing capital investment for a number of years.

The fund is replanting its plantation in Malaysia with high quality timber which will take 14 years to mature.

In Indonesia, the plan is to grow 30,000 hectares of world-scale rubber plantation. TAFF so far has planted 14,000 hectares.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2548

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 300-400m.
    Closing date: 2019-07-30.

  • QN-2549

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 300-700m.
    Closing date: 2019-07-30.

  • QN-2550

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2551

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2552

    Asset class: Fixed Income, High Yield (Active).
    Asset region: High Yield (US).
    Size: CHF 500-600m.
    Closing date: 2019-07-29.

  • QN-2553

    Asset class: Fixed Income, High Yield (Passive or Passive Enhanced).
    Asset region: High Yield (US).
    Size: CHF 500-1'100m.
    Closing date: 2019-07-29.

  • QN-2554

    Asset class: Global Real Estate (Equity, unlisted Funds).
    Asset region: World (ex-Switzerland).
    Size: CHF 200 mn (potential for further growth).
    Closing date: 2019-08-07.

  • QN-2555

    Asset class: Real Estate.
    Asset region: European.
    Size: EUR 50 - 100 million.
    Closing date: 2019-07-22.

  • QN-2556

    Asset class: FX Hedging.
    Asset region: Global.
    Size: Mandate size of CHF 1.5 bn.
    Closing date: 2019-08-09.

  • QN-2557

    Asset class: All/large Cap Equities.
    Asset region: China A-shares.
    Size: Unit linked platform (0m USD in initial investment).
    Closing date: 2019-08-01.

Begin Your Search Now