Another not-to-miss speaker at the upcoming Impact Investment Summit is New Forests CCO Michael Barbara, who will be showcasing the African Forestry Investment Platform (AFIP) in the ImpactConnect Deals Room.
Founded almost 20 years ago, New Forests offers institutional investment strategies that create value from the sustainable management of forests and enhancement of natural capital.
By 2030, New Forests wants to see all capital allocations to forests and other land use invested in strategies that create climate-positive and nature-positive landscapes — integrating conservation, restoration, and sustainable production and generating shared value for communities.
New Forests’ investment strategies seek to create positive impacts at scale in three areas: Nature-based Solutions, Shared Prosperity, and the Circular Bioeconomy. They also use their voice through advocacy, working with governments, industry, and civil society to amplify their influence and advance their vision.
African Forestry Impact Platform
New Forests’ dedicated African fund, the African Forestry Impact Platform (AFIP), is seeking to raise long term institutional capital to support the sustainability and development of Africa’s growing forestry sector.
This is an opportunity to invest in a forestry exposure in high-risk, high-return emerging market context, coupling with delivering significant impact outcomes.
AFIP is establishing a large-scale, long-term and value creation focused, actively managed investment platform that will deploy capital across the forest landscape in Sub-Saharan Africa.
The platform is focused on impact investing through developing markets, investing with a focus on climate, socioeconomic development and import substitution through a combination of timber sales with carbon credits. Being a long term investment vehicle allows for optimised return on investment, as there is not the constraint of fund exit.
The fund has already locked in US$200 million in commitments. Of that, around three-quarters has been deployed into a cornerstone investment. This first acquisition was Green Resources — East Africa’s largest forestry and wood processing company, which manages 38,000 hectares of pine and eucalyptus plantations in Tanzania, Uganda and Mozambique.
That initial capital came from three primary investors — British International Investment (BII), Norfund, and Finnfund, the development finance institutions of the UK, Norwegian, and Finnish governments, respectively.
These development finance institutions are high quality investors to invest alongside, providing a greater level of confidence and certainty to new investors to the platform. And given their established networks and relationships in these markets, these investors are able bring additional knowledge to the table and help the fund navigate the complexities of investing in emerging markets.
Now raising further long term capital
AFIP is now seeking to raise further long term institutional capital to meet demand and the pipeline in Sub-Saharan Africa, and bring the fund size to US$500 million.
It is raising capital in a permanent capital vehicle, putting in place more of an iterative structure that provides investors with liquidity, and will align with the longer term objectives that can be delivered by holding and managing the assets over the long term.
AFIP seeks to deliver a nominal net return of 10-10.5% with an annual cash yield of 2-4%.
The fund also targets four key areas of impact, which are embedded in the investment and operations management strategy, with part of the manager’s remuneration tied to meeting them.
These impact targets include:
- Climate change mitigation and net carbon removals
- Grow quality of biodiversity habitat
- Improving quality of livelihoods for local communities
- Achieve 2X gender equality across 80% of portfolios
For more on New Forests and its Africa strategy see: https://newforests.com/investment-capabilities/africa/, or pop into the ImpactConnect deals room at the upcoming Impact Investment Summit (tickets are still available!).