New Forests, a Sydney-based sustainable real assets investment specialist, is pressing ahead with its responsible investment approach in Asia to capitalise on growing institutional interest in environmental, social and governance (ESG) investments in the region.
David Brand, chief executive officer at New Forests, tells Asia Asset Management that the company is primarily engaged in managing a diverse set of forestry investments in the US, Australia and New Zealand. Over the years, the business has seen substantial growth and now has A$2.8 billion (US$2.1 billion) in total AUM, since its inception in 2005 with total AUM of A$50 million.
The growth was partly fuelled by its Asian expansion. In 2013, New Forests established its footprint in Asia with the launch of its first institutional investment fund, the Tropical Asia Forest Fund (TAFF), dedicated to sustainable forestry in tropical Southeast Asia with $170 million of committed capital from pension funds and developed banks.
In December 2015, TAFF formed a joint venture with Indonesia-listed PT Sampoerna Agro Tbk to invest in an Indonesian rubber plantation. The investment includes an environmental & social agreement (ESA) that accompanies the shareholder’s agreement and covers the implementation of ESG measures.
Mr. Brand believes that Asian institutional investors have become more aware of the significance of ESG. From an operational perspective, institutional investors could benefit from ESG investment by realigning their corporate structure to their communities and the economic outcomes of their investments.
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