June 13, 2024
Investment

New Exemplary Forestry Investment Fund Makes First Acquisition


A new investment fund, which aims to generate both environmental and financial returns for investors, has made its first acquisition in Maine.

The Exemplary Forestry Investment Fund has bought the 3,000-acre Scammon Ridge Headwaters forest from the Haynes Family of Winn, Maine.

The fund has been created by Exemplary Forestry Management, together with its partners New England Forestry Foundation, Maine Mountain Collaborative, and Quantified Ventures, using a mixture of leveraged philanthropic, private, and public capital.

It aims to eventually own and manage 100,000 acres of Maine forest by utilizing the exemplary forestry approach.

The New England Forestry Foundation’s senior forest science and policy fellow, Alec Giffen said in an interview this approach is all about using the best forestry techniques to help mitigate the impact of climate change, improve wildlife habitats and increase biodiversity.

“You start by looking at each forestry landscape and asking yourself ‘what is missing from this landscape?’,” he explained.

“The approach we have proposed in Maine’s Acadian forests and hard woods is designed to meet the habitat needs of more than 75% of the native wildlife species, who use that area.”

Giffen added under current plans, they also plan to create small gaps in the forest, ranging from under an acre to two or three acres to help thin out some of the trees and improve the residual wood stock.

He said by taking an exemplary forestry approach, they estimate it could increase the amount of carbon sequestered from the atmosphere by around 30 tonnes per acre over 25 years.

MMC executive director, Bryan Wentzell said in an interview the aim of the new fund is to create a new landownership and investment model.

Wentzell said conservation groups have been working over the last 30 years to try and preserve the 26 million acres of Acadian forest across the region.

“We developed this new investment fund to create the ideal landowner, who will match investors’ expectations with the ecological capacity of the forest,” he told me.

“There are very few models like this around the country or the world,” added Wentzell.

The fund is run and overseen by the non-profit Exemplary Forestry Management, which comprises investment and forestry professionals, with the on-the-ground operations handled by a highly respected forest management company.

Adherence to exemplary forestry standards will be assured through the oversight of a board of directors with cross-disciplinary expertise in forestry, conservation, ecosystem markets, and finance.

The Scammon Ridge Headwaters property is owned by Scammon Ridge Headwaters LLC – the first fund under the fund initiative.

Two of the fund’s investors include the Maine Community Foundation and the Elmina B. Sewall Foundation.

With increasing awareness about the need to mitigate the impacts of climate change and preserve historic woodlands, the fund comes at a crucial time.

New England Forest Foundation executive director Robert Perschel said the fund’s blended capital approach, with 50% investment capital and 50% sources from philanthropic sources, means actions to safeguard these woodlands can start today.

“We aim to make investment in these forests now that help long term growth and forest health that may not pay off for 15 years or more,” added Perschel.

Pete Madden, president and CEO at the Endowment for Forestry and Communities, which provided a grant award for a feasibility study to determine the potential viability of the project, said in an email the new fund will enhance timber inventories, improve carbon storage, and conserve wildlife habitat, among other values cherished in Maine.

“It offers investors an opportunity to help ensure the health and sustainability of forests that provide many benefits to our society. This project is a strong example of how the Innovative Finance for National Forest program is encouraging new approaches to finance forest management and retention,” added Madden.

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