About This Fund
New Forests Tropical Asia Forest Fund 2 (TAFF2) is a closed-end sustainable forestry and nature-based solutions fund managed by New Forests Asset Management, an Australian timberland and natural capital investment manager overseeing A$7.8 billion in assets across more than 1.1 million hectares globally. New Forests was acquired by Mitsui and Nomura in May 2022. TAFF2 is the successor to the original Tropical Asia Forest Fund (TAFF1), which closed at $170 million in 2012-2013 and pioneered institutional investment in tropical sustainable forestry across Southeast Asia.
TAFF2 employs a blended finance structure with two share classes: a commercial Class A tranche targeting 12-18% gross IRR in USD for conventional timber and natural capital returns, and a concessional Class B tranche targeting 4-8% gross IRR for investors seeking enhanced sustainability impact outcomes and below-market risk-adjusted returns. The fund invests in sustainable plantation forestry and nature-based solutions across tropical Southeast Asia — including Malaysia, Indonesia, Vietnam, Thailand, Laos, and Cambodia — targeting plantation forestry, peatland conservation, agroforestry, and carbon credit generation from approximately 10 million tonnes of carbon offset over the fund's life. End markets include timber, rubber, carbon credits, and ecosystem services. The fund is certified to international ESG and forestry standards and is aligned with the Paris Agreement and UN Sustainable Development Goals. Legal adviser was King and Wood Mallesons and fund administrator is Apex Group.
TAFF2 held its first close in March 2022 at $120 million, attracting commitments from the Asian Development Bank ($15 million, including $10 million from the Australian Climate Finance Partnership trust fund), the Australian Government, the David and Lucile Packard Foundation, Sumitomo Mitsui Trust Bank, GenZero (Temasek's decarbonisation investment platform), and TotalEnergies. The fund reached its final close in January 2024 at $130 million — below its $300 million target — reflecting the challenging fundraising environment for blended finance structures in this period. Confirmed portfolio investments include the Kuan Kreng Landscape Peatland Conservation and Restoration Project in Thailand and Burapha Agro-Forestry in Laos.