Japan's Mitsui, Nomura to acquire Australian forestry asset manager New Forests

Japan’s diversified conglomerate Mitsui & Co and financial services group Nomura Holdings have agreed to acquire Australia-headquartered nature-based real asset manager New Forests.

Mitsui, which has been a shareholder in New Forests since 2016 with a 23% stake, will increase its holding to 49%, and Nomura will become a 41% shareholder while the remaining 10% shares will be retained by the New Forests staff.

David Brand, founder and CEO of New Forests, will continue with the firm until June 30, 2025, and focus on strategic initiatives and growth opportunities, New Forests said in a statement.

Two representatives each from Mitsui and Nomura will join the New Forests board of directors, along with two independent directors and an employee nominee director.

The transaction is expected to be completed by December 2022.

New Forests said the investor duo will provide capital to support its strategic growth initiatives and the global expansion of its investment platform.

New Forests invests in sustainable land use and forestry, managing a portfolio of timber plantations and conservation areas, carbon and conservation finance projects, agriculture, timber processing and infrastructure assets.

“Mitsui’s investment in New Forests is part of our sustainability strategy to invest in companies that are at the forefront of climate change mitigation and are positively contributing to communities,” said Hiroshi Kakiuchi, managing officer and chief operating officer of performance materials business unit at Mitsui.

Meanwhile, Yoshihiro Namura, Nomura’s senior managing director and head of investment management division, said New Forests’ approach to climate change was “complementary to Nomura’s business”.

New Forests manages A$7.8 billion ($5.8 billion) in assets across 1.1 million hectares of investments.

In March, it reached a first close of its Tropical Asia Forest Fund 2 (TAFF2) with $120 million of capital commitments. Investors in the fund include Asian Development Bank, the Australian Government, David and Lucile Packard Foundation, Sumitomo Mitsui Trust Bank, Temasek and TotalEnergies.

The firm said it anticipated a second close later this year, with a goal of raising $300 million.

TAFF2 is focused on sustainable plantation forestry opportunities in Southeast Asia markets such as Malaysia, Indonesia, Vietnam, Thailand, Laos and Cambodia.

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