Manulife Investment Management said this week it has closed on its Manulife Forest Climate Fund with $480 million in capital commitments from investors seeking carbon-driven opportunities in forestland.
Manulife is one of the largest timberland investment managers in the world, with more than five million acres under management.
Participants in the fund include qualified U.S. investors, corporates and global institutional investors “interested in the opportunity to promote climate change mitigation through investment in sustainably managed forests where carbon sequestration is prioritized over timber production,” Manulife said in a press release.
“We have seen strong interest in the forest climate strategy from a broad base of global investors, further highlighting the acceptance and growing use of forestland as a climate change mitigation tool that has added new dimensions to timberland investment,” said Tom Sarno, global head of timberland investments, Manulife Investment Management.
The fund prioritizes climate change mitigation through sustainably managed forests, aiming to sequester over 6 million tons of carbon dioxide over the fund term. The fund will look to deliver durable, high-quality carbon credits to investors and annual optionality for in-kind carbon credit distributions or offset sales.
The fund has already started to develop a diversified portfolio in support of its investment thesis. It has acquired more than 150,000 acres and is approaching 50% deployment:
- The fund’s first acquisition, Eagle Cap, is located in northeastern Oregon and southeastern Washington, and was acquired with the primary intention of generating consistent cash flow from sustainable forestry operations.
- The second acquisition, Siscowet, is located on the upper peninsula of Michigan. Named for the deep-water trout native to nearby Lake Superior, it had been held by the seller for over a century and managed primarily for timber production.
- The most recent acquisition for the fund, Oak Bluff, has a footprint that includes counties in Mississippi, Louisiana and Arkansas. Much like Siscowet, the historical management practices and current timber inventory makes this investment well suited for the production of high-quality carbon credits while also exhibiting the potential to produce attractive income from other sources, the company said.
The team has identified a pipeline of additional opportunities in 2025 to further diversify and grow the portfolio.
“Investors are showing confidence in forests as a top natural climate solution,” said Eric Cooperstrom, managing director, impact investing and natural climate solutions, Manulife Investment Management. “With the interest we have seen in the fund, we will continue to pursue natural climate solutions to drive new opportunities for impact and results for our clients.”
Manulife IM’s $100 billion diversified private markets platform includes infrastructure, real estate, private equity, private credit, timberland and agriculture.
Read more: Ending deforestation is critical for emissions targets, and food companies’ bottom lines
