Manulife Financial’s global wealth and asset management business Manulife Investment Management announced that it has raised $224.5 million in commitments at the initial close of Manulife Forest Climate Fund LP, reaching nearly the halfway mark towards the fund’s targeted $500 million in committed capital.

Launched in late 2022, and aimed at providing investors with the opportunity to invest in nature and climate change mitigation and delivering value through carbon credits, the new fund invests in a globally diversified portfolio of sustainably managed forestland assets, where carbon sequestration is prioritized over timber production. The strategy also includes the establishment of new forests through afforestation or reforestation.

According to Tom Sarno, Global Head of Timberland Investments at Manulife Investment Management, the capital raise comes as amid strong demand for climate change solutions and “strong investor interest in strategies that may help support carbon emissions reductions and net zero commitments.”

Sarno added:

“We believe that an investment in Manulife Forest Climate Fund can help support  investors’ various climate goals and objectives and that the experience we have in sustainable forest management, as well as our commitment to high-quality  carbon sequestration, brings additional value to the strategy.”

Financial returns for investors will be generated by the fund through the use of carbon credits, conservation easements, non-timber income generation strategies, and limited timber harvests, according to Manulife. The firm added that the long-term supply of carbon credits generated by the fund can be used by investors to support their own climate goals, or to realize financial value through monetization in the carbon markets.

Eric Cooperstrom, Managing Director, Impact Investing and Natural Climate Solutions at Manulife Investment Management, said:

“The Manulife Forest Climate Fund expands on our decades of sustainable timberland management experience and is one of the natural climate solutions we have developed to sequester carbon more intensively and drive broader impact. Responsible commitments to reducing and removing emissions, inclusive of high-quality forest carbon credits, are extremely important to help investors meet their climate and financial goals.”