Global forestry manager New Forests has acquired the 7,654-hectare McCloud Forest in the US for an undisclosed price.
The nature-based real assets investment manager said the asset in the Mount Shasta region of California is the first asset acquired for its Forest Climate Solutions Fund (FCS).
FCS, which is currently in the market and aiming to raise between $300m and $400m (€273m-€364m), focuses on combining returns from timber alongside carbon credits developed and sold in the California-regulated carbon market.
Jeff Briggs, managing director of New Forests United States, said: “The McCloud Forest is a quality asset with solid returns from timber revenue and potential upside from carbon and other ecosystem values.
“We will be applying our sustainability approach to this asset, and over time intend to adjust harvest activities to allow trees to grow for longer, capture more carbon and process a higher percentage of the wood into more sustainable solid wood products.”
The McCloud Forest, which consists of mixed conifers, including true fir, Douglas fir and ponderosa pine, sits adjacent to two other investments managed by New Forests, providing economies of scale, local knowledge and access to already-established domestic processing facilities.
New Forests is forecasting that the McCloud asset should generate significant income from the development of a carbon offset project under the California Air Resources Board compliance protocol. This income, combined with ongoing management of the asset for timber production, is expected to provide attractive returns, according to the manager.
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