Manulife Investment Management has announced the final close of the Manulife Forest Climate Fund LP and its affiliated offshore vehicles, raising $480.1 million in commitments. The fund has attracted a diverse mix of investors, including U.S. qualified investors, corporates, and global institutional investors, aiming to mitigate climate change through investment in sustainably managed forests that prioritise carbon sequestration over timber production.
The fund seeks to create a diversified portfolio of forestland assets, aiming to sequester over 6 million tonnes of carbon dioxide over its term. It will deliver high-quality carbon credits to investors, with options for in-kind carbon credit distributions or offset sales. The strategy also includes afforestation and reforestation initiatives to generate additional carbon credits and support long-term sustainable timber value.
To date, the fund has acquired over 150,000 acres of forestland, with nearly 50% of the capital already deployed. Plans are in place to further expand and diversify the portfolio in 2025.
The fund’s first acquisition, Eagle Cap, spans northeastern Oregon and southeastern Washington. Initially focused on sustainable forestry operations, the property has also contributed to conservation efforts through the sale of 1,072 acres to expand the Minam River Wildlife Area. This transaction, completed in partnership with state agencies and a conservation organisation, reflects ongoing efforts to balance sustainable forestry with land conservation.
The second acquisition, Siscowet, located in Michigan’s Upper Peninsula, was previously managed for timber production for over a century. Its growth rates and timber inventory position it as a strong foundation for carbon credit generation, while maintaining the flexibility for timber harvesting.
The most recent acquisition, Oak Bluff, covers areas in Mississippi, Louisiana, and Arkansas. Its historical management practices make it well-suited for producing high-quality carbon credits while also offering potential income from other sources.
“We are excited to announce this milestone for the Manulife Forest Climate Fund and 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.
Eric Cooperstrom, managing director, impact investing and natural climate solutions, Manulife Investment Management said, “Investors are showing confidence in forests as a top natural climate solution. 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.”
