Bluesource and Oak Hill Advisors launch $500 million joint venture to purchase forest lands for carbon projects
Salt Lake City, UT | October 12, 2021
The following information was first published by Bluesource on October 12, 2021 prior to the launch of Anew.
Bluesource, North America’s most experienced and most diversified corporate climate advisor, with investment partner Oak Hill Advisors, a leading alternative investment firm with more than $50 billion in assets, today announced a $500 million joint venture to purchase and more sustainably manage over one million acres of forest land. This will complement the three million acres of forests that Bluesource currently manages for carbon and spurs the pace of protecting this critical resource for climate action.
This unprecedented endeavor marks the start of an evolution in forestry investments that Bluesource intends to lead in the industry. Traditional forest management undervalues the role trees play in the fight against climate change, and the risks of managing forests for climate benefits are not well enough understood by many timber investors to allow them to make the necessary practice changes. Bluesource plans to accelerate this evolution toward sustainable forest management through its own purchases and through co-investment alongside others, where it will share its deep carbon expertise with other landowners. The goal is to increase the understanding of carbon management sufficient to incentivize necessary behavioral change that promotes the long-term health of forest land in North America.
“The idea here is not simply to invest in forests, it’s to invest in forestry in such a way that the entire industry comes along,” said Bill Townsend, Bluesource Chairman and Chief Strategy Officer. “Over the last decade, we have been asked by a number of forest investors to place capital alongside our carbon knowledge. We took this step to not only practice what we preach but inspire others to do the same, because we know this can play a significant part in addressing the global challenges we face.”
Projects will be selected based on numerous criteria, among the most important of which is selecting properties where managing for increased climate benefits would not occur without a change in landowner. Properties will participate both in voluntary and compliance markets throughout North America. Revenues from carbon offset sales are key to justifying the acquisition and repurposing of the land, which will reduce timber harvesting in favor of carbon sequestration. This represents the beginning of an expansive opportunity to repurpose forest investments that otherwise would strictly consider revenue from timber harvests.
“This joint venture is an opportunity to accelerate the evolution of sustainable forestry and the ongoing development of the carbon credit markets,” said Adam Kertzner, Portfolio Manager and Senior Partner at Oak Hill Advisors. “We are excited about both the positive environmental impact as well as the highly attractive investment attributes in this large and growing market.”
Under the new entity, Bluesource Sustainable Forests Company, certain properties will be purchased directly while others will have the potential to become a co-investment alongside traditional timber managers and investors. By working alongside Bluesource, timber management groups will benefit from the company’s expertise in maximizing forest health, carbon reduction, carbon quantification, and carbon markets. This establishes a financial incentive and opportunity for timber companies who are willing to engage in climate-oriented forestry practices over other logging methods that cause negative ecological impacts that last for generations.
“It’s exciting to see that environmentally focused firms like ours now have more capital to make meaningful impacts, and these funds enable us to quickly act upon opportunities we see,” said Roger Williams, Bluesource’s President. “For the last fifteen years Bluesource has focused on helping landowners manage acres for climate benefits, and that won’t change. The formation of Bluesource Sustainable Forests Company is a critical acceleration of this effort, and we hope that in the next decade, North America will have an enhanced appreciation of the role of forests in combating climate change.”
“We are thrilled to be exclusively partnering with Bluesource in forming this joint venture,” said David Light, Managing Director at Oak Hill Advisors. “We believe OHA’s complementary fundamental-oriented approach and flexible capital paired with Bluesource’s leadership role in the environmental attribute markets and extensive expertise in forestry assets, positions this partnership for success.”
Bluesource is the most experienced and most diversified corporate climate advisor providing innovative, trusted environmental services and products in North America. A full-service climate and energy action partner, Bluesource counsels leading organizations at every stage of the business cycle to simplify their next steps toward achieving their climate and environmental goals. With an understanding that no business, organization, or government agency regardless of its size can afford to be absent from the climate conversation, Bluesource has the breadth of services and depth of experience to help clients achieve their environmental and energy goals simply, efficiently, and credibly.
Guggenheim Securities, LLC, acted as exclusive financial advisor and placement agent to Bluesource.
Anew Climate, LLC (“Anew”) is accelerating the fight against climate change by enabling companies and organizations to align their goals for conservation and impact with actionable next steps. With a comprehensive solutions portfolio that includes advisory services, carbon credits, renewable natural gas, renewable energy certificates, EV credits, plastic credits, and emission reduction credits, we lower barriers to participation in environmental markets for clients across the private and public sectors. As a leading marketer and originator of environmental products, we bring together strategic finance, regulatory expertise, scientific knowledge, and impact focus to make it possible for businesses to thrive while building a sustainable future. Anew is majority owned by TPG Rise, TPG’s global impact investing platform, and emerged from the February 2022 combination of durational industry leaders Element Markets, LLC and Blue Source, LLC. The company has offices in the U.S., Canada, and Europe, and an environmental commodities portfolio that extends across five continents.
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About Oak Hill Advisors
OHA is a leading alternative investment firm with $57 billion of capital under management across its private, distressed, special situations, liquid, structured credit, and real asset strategies. OHA has generated attractive risk-adjusted returns over its more than 30-year history by specializing in performing and distressed credit-related investments in North America, Europe, and other geographies. OHA employs more than 350 people globally and is headquartered in New York, with primary offices in London, Sydney, Hong Kong, Luxembourg, and Fort Worth. Oak Hill Advisors is a subsidiary of T. Rowe Price.
For further information about OHA, please visit oakhilladvisors.com.
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