CDPQ Launches US Forestland Platform, Takes Stake in UK's Hydro One
CDPQ and Chinook Forest Partners have launched a new investment platform to build a diversified portfolio of forestland in the Pacific Northwest, US.
Chinook will manage the assets and deploy capital, with CDPQ becoming a minority shareholder to support the firm's growth and its natural capital portfolio expansion.
Founded in 2018, Chinook Forest Partners consists of professionals experienced in forestland and natural capital investments, with a network of landowners, forest product manufacturers, and external partners across the US.
Scott Marshall, founding partner and CEO of Chinook, stated that the partnership provides an opportunity to deploy capital efficiently and increase operational efficiencies across forestland ownership.
Chinook Founding Partner Kelly Droege highlighted the alignment of values and commitment to sustainability, which serves as a solid foundation for long-term forestland management.
Emmanuel Jaclot, CDPQ’s executive vice-president and head of Infrastructure, expressed enthusiasm about the partnership, emphasising CDPQ's focus on deploying capital towards sustainable land management in the region.
CDPQ's investment forms part of its Sustainable Land Management initiative, launched in 2020, which aims to deploy capital in land-focused assets with long-term environmental impact and ESG standards.
CDPQ has previously partnered with leaders in timberland, agriculture, wetlands restoration, carbon capture, and species protection in the US and Australia.
Earlier this week, CDPQ announced it is launching a platform focused on US forestland through an investment in Chinook Forest Partners:
CDPQ, a global investment group, and Chinook Forest Partners, a natural capital investment manager, today announced the launch of a new investment platform that will deploy significant capital to build a diversified and high-quality portfolio of forestland in the Pacific Northwest region of the United States.
The deployment of capital and management of assets will be carried out by Chinook, of which CDPQ will become a minority shareholder to support the firm’s growth as it looks to boost its portfolio of natural capital assets and develop more structures to meet the needs of new investors.
Established in 2018, the Chinook team is made up of experienced forestland and natural capital investment professionals with comprehensive understanding of the natural capital and landscape investment space, as well as a vast network of landowners, forest products manufacturers, external partners, and natural capital investors across the United States.
“This partnership represents a fantastic opportunity to efficiently deploy capital while increasing operational efficiencies across our forestland ownership base, which will better serve our investors”, said Scott Marshall, Founding Partner and CEO of Chinook Forest Partners. Chinook Founding Partner Kelly Droege added, “We could not be more excited about our partnership with CDPQ. The alignment of culture, values and commitment to sustainability provide a solid foundation for the long-term management of forestlands in the Pacific Northwest”.
“We are thrilled to partner with Chinook as we look to deploy our constructive capital to contribute to the preservation and sustainable management of lands in the Pacific Northwest region of the United States, the world’s second largest forest area,” said Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ. “By investing in forestland, we are not only protecting valuable natural assets but also contributing to the transition towards a greener economy.”
CDPQ’s Sustainable Land Management initiative
CDPQ is making this investment as part of its Sustainable Land Management initiative, established in 2020 within the Infrastructure portfolio. The mandate seeks to deploy capital in land-focused assets with long term positive environmental impact and the highest ESG standards. Over the past fours years, CDPQ has established partnerships with industry leaders in sustainable timberland, agriculture, wetlands restoration, carbon capture and species protection across the United States and Australia.
ABOUT CDPQ
At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at June 30, 2024, CDPQ’s net assets totalled CAD 452 billion. For more information, visit cdpq.com, consult our LinkedIn or Instagram pages, or follow us on X.
CDPQ is a registered trademark owned by Caisse de dépôt et placement du Québec and licensed for use by its subsidiaries.
ABOUT CHINOOK FOREST PARTNERS
Chinook Forest Partners, LP is a natural capital investment manager providing clients with opportunities to invest in long-term, sustainability managed real assets. Our executive team has over 60 years of combined experience in the natural resource investment space, and we pride ourselves on our landscape approach to resource management, conservation, and positive community impacts. For more information, visit chinookforestpartners.com.
This is an interesting deal because I believe it's CDPQ's first foray into US timberland, an asset class I know all too well as I worked on a board presentation back in 2005 to introduce it into PSP Investments' portfolio.
CDPQ wisely chose to partner up with Chinook Forest Partners, a natural capital investment manager, to develop a platform that will deploy significant capital to build a diversified and high-quality portfolio of forestland in the Pacific Northwest region of the United States.
No financial details were provided however, I remind my readers that in June 2023, CDPQ partnered with Australia's acquire minority stake in Gunn Agri Partners, and create AUD $200m sustainable agriculture platform (see my comment here).
I wouldn't be surprised if this new platform is also around US$100 million and will eventually grow to US$300 million over time.
The key thing is the people at Chinook have a lot of experience in this area and will help CDPQ scale up relatively fast:
In related news, CDPQ announced this week it has acquired 25% of UK’s First Hydro Company from Brookfield:
- Investment in a critical national infrastructure providing 76% of the United Kingdom’s total pumped hydro storage capacity
CDPQ, a global investment group, today announced it has entered into an agreement with Brookfield Asset Management (NYSE: BAM, TSX: BAM) and its institutional partners, including its listed affiliate Brookfield Renewable (NYSE: BEP, BEPC; TSX: BEP.UN, BEPC) (together “Brookfield”), to acquire its 25% stake in First Hydro Company, a critical electricity generation and storage facility in the United Kingdom. Engie is the majority shareholder who owns the remaining 75% of the company.
Responsible for the management and operation of two power plants at Dinorwig and Ffestiniog in the Snowdonia region of Wales, First Hydro offers a capacity of more than 2,000 MW, representing 76% of the total pumped hydro storage in the United Kingdom, making it a critical infrastructure to face the country’s increasing needs of grid flexibility and stability.
“First Hydro is playing a critical role in helping the United Kingdom manage its national electricity system and meet its net zero commitment by providing renewable electricity and storage capabilities,” said Emmanuel Jaclot, CDPQ’s Executive Vice-President and Head of Infrastructure. “This investment marks CDPQ’s first foray into pumped hydro storage, and we are delighted to join forces with Engie, a longstanding partner for CDPQ and a world leader in the energy sector.”
“We are pleased to have supported First Hydro throughout our ownership period including securing its long-term future through active management of the business. First Hydro will continue to provide considerable renewable power to the U.K. long into the future,” said Ignacio Gomez-Acebo, Managing Director at Brookfield.
Financial close is expected by end of 2024, subject to customary closing conditions and relevant consents and approval.
About CDPQ
At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at June 30, 2024, CDPQ’s net assets totalled CAD 452 billion. For more information, visit cdpq.com, consult our LinkedIn or Instagram pages, or follow us on X.
CDPQ is a registered trademark owned by Caisse de dépôt et placement du Québec and licensed for use by its subsidiaries.
About Brookfield Asset Management
Brookfield Asset Management Ltd. (NYSE: BAM, TSX: BAM) is a leading global alternative asset manager with approximately $1 trillion of assets under management. We invest client capital for the long-term with a focus on real assets and essential service businesses that form the backbone of the global economy. We offer a range of alternative investment products to investors around the world — including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors.
Brookfield operates Brookfield Renewable Partners (NYSE: BEP, TSX: BEP), one of the world’s largest publicly traded platforms for renewable power and sustainable solutions. Our renewable power portfolio totals over 34,000 megawatts and our development pipeline stands at approximately 200,000 megawatts. Our portfolio of sustainable solutions assets includes our investments in Westinghouse (a leading global nuclear services business) and a utility and independent power producer with operations in the Caribbean and Latin America, as well as both operating assets and a development pipeline of carbon capture and storage capacity, agricultural renewable natural gas and materials recycling.
This is a critical infrastructure asset which CDPQ will now own a minority stake along with Engie, a global energy player with UK investments in renewable energy and storage.
Great deal with Brookfield and an amazing partner in Engie to take this asset to the next level.
Lastly, this is Climate Week in New York City and CDPQ representatives and those of of other large Canadian pension funds gathered to discuss and exchange ideas on decarbonizing this world.
I might ask Marc-André Blanchard Executive Vice-President and Head of CDPQ Global and Global Head of Sustainability to spare some time with me as soon as he can to discuss the main ideas that came out of there.
I might also fire off an email to all the heads of responsible investing and ask them for their key takeaways as it's an important area I admittedly hardly cover on my blog because it's so vast and easy to get lost in the weeds.
Below, Dennis Kepler, a Resource Assessment Supervisor at the Minnesota Department of Natural Resources, shares specifics about the Forest Inventory and Analysis (FIA) Program. The Forest Inventory and Analysis is a congressionally mandated program that delivers current, consistent, and credible information about the status of forests and forest resources within the United States.
Also, Engie is simplifying, refocusing and accelerating with an ambitious goal: Net Zero Carbon by 2045. This is how they're going to reach it.
Like I stated above, great partner to have owning a stake in First Hydro Company.
Lastly, watch a panel discussion from Climate Week New York titled "The Path to a Net-Zero Industry: Accelerating the Transition through Global Leadership and Collaboration".
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