The Article 9 fund has been created in partnership with natural capital specialist IWC, majority owned by BNP Paribas Asset Management, and has raised $130m at first close.
BNP Paribas Asset Management (BNPP AM) has launched a forest fund with natural capital subsidiary International Woodland Company (IWC), aimed at boosting biodiversity and meet rising demand for sustainable forestry.
The BNP Paribas Future Forest Fund, classified as an Article 9 fund under SFDR, had its first close this month, after raising $130m (€124m). The global asset manager is aiming to raise as much as $500m, with a hard cap of $750m.
Copenhagen-based IWC, a global natural capital specialist majority owned by BNPP AM, provides investment management and advisory services within sustainable forest and agriculture investments, and ecosystems restoration.
The new fund “illustrates the common vision we have with IWC to actively contribute to the environmental transition”, said David Vaillant, global head of finance, strategy and participations at BNPP AM and chairman of IWC.
The forest fund will invest in between eight to 12 assets in the US, Australia, New Zealand, and Europe. It will only fund forests that are certified by the Forest Stewardship Council (FSC).
The launch of the new fund “will enable us to answer our clients’ growing interest in this new asset class as we widen our breadth of natural capital solutions”, Vaillant said.
Global wood demand soaring
Over the last 60 years, global demand for wood products has doubled. Demand for wood may jump by 37% to 60% between 2020 and 2050, BNPPB AM said, citing the UN Food and Agriculture Organisation. This increase is partly being driven by population growth, more people moving to urban areas, a rise in per capita income, and the green transition.
The forest fund “represents a significant step forward to bring sustainable forestry investment into the mainstream and recognises timberland as a compelling investment proposition”, said Otto Reventlow, chief executive officer of IWC. “With this fund, we ensure that our focus on commercial viability is balanced with a strong commitment to protect and enhance biodiversity and climate resilience.”
