August 27, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

Hancock Natural Resource Group (HNRG), a company of Manulife Investment Management, has made its second Brazilian timberland deal for the year so far (third for its timberland and agriculture team in South America), stating that the expansion of its timberland portfolio in Brazil is a strategic priority, and a part of a broader mandate to grow its private markets’ global capabilities across real assets, private equity, and credit.

Through its affiliate Rio Verde Holding Ltda, HNRG acquired two operating companies with land use rights to 43,332 hectares (107,075 acres) of highly productive eucalyptus plantations in Mato Grosso do Sul, Brazil, from Copa Gestão de Investimentos Ltda., (“Copa”).

“We are pleased to announce this transaction to further build our investment platform in Brazil, which will benefit from the additional size and scale provided by the acquisition of these plantations,” said Tom Sarno, global head of timberland investments, Manulife Investment Management. “Finding high-quality assets, and working strategically with key Brazilian counterparties, continues to be a key focus to enhance and diversify clients’ portfolios.”

In March of this year, HNRG and Manulife Investment Management announced the acquisition of 12,874 hectares (31,812 acres) of eucalyptus plantations in Mato Grosso do Sul, Brazil, through its affiliate Sempre Verde Florestas e Agricultura Ltda, from AMATA, through AMATA subsidiary APEI Plantio de Floresta Exotica S.A. (APEI).

Much of Brazil’s managed eucalyptus plantations provide raw materials to mills for paper production. However, the market is expanding, with eucalyptus log exports from Brazil growing by 122 percent from 2017-2018, with 89 percent of those exports going to China, according to data gathered by Forest2Market Consultants. And as deforestation becomes an ever-more critical global concern, demand for sustainable wood is growing as well – with Brazilian eucalyptus gaining particular attention as a substitute for exotic woods from the Amazon.

All of AMATA’s forestry operations are FSC certified, and the company operates according to the best practices of environmental, social, and corporate governance (ESG) through sustainable and profitable management to bring its engineered wood products at scale to the civil construction sector in Brazil.

Over nearly the past decade, AMATA has implemented state-of-the-art technology in the growing and maintaining of the forests, which has resulted in them being in the top quartile for the region.

“We look forward to working with strategic partners like AMATA to expand in South America,” said Tom Sarno, global head of timberland investments, HNRG. “Given the region’s volume of high-quality real assets and its importance to global commodity markets and future supply chains, these acquisitions are an opportunity for us to build out our investment platform for clients.”

Concurrently, Manulife expanded its impact investing and natural climate solutions team through the creation of the new role of managing director, Impact Investing and Natural Climate Solutions at HNRG. This role is filled by Eric Cooperström, who will oversee the sustainability and responsible investing capacity for the group’s timberland and agriculture teams.

“We are excited to have Eric onboard as his expertise and background will be integral in developing our impact-first investment strategies,” said Brian Kernohan, chief sustainability officer, private markets, Manulife Investment Management in March. “We believe forests and farms are natural climate solutions, and we see removing carbon from the atmosphere and storing it in trees and soils as a viable option for investors who are looking to optimize and prioritize carbon sequestration.”

As was the case with the acquisition in March, these latest plantations supply the increasing demand for bleached eucalyptus kraft pulp mills, with the benefit of close proximity to the pulp producers. Copa has leveraged state-of-the-art technology to sustainably grow and maintain these forests, which has resulted in top quartile plantations in the region.

As a part of Manulife’s Private Markets platform, which includes private equity and credit, infrastructure, real estate, timber, and agriculture, HNRG now manages 5.7 million acres of timberland across the U.S., Canada, New Zealand, Australia, Brazil, and Chile, and 400,000 acres of prime farmland across major agricultural regions in the U.S., Canada, Chile, and Australia.

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.