Acquisition of forest lands part of green initiative by joint venture

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Bluesource Sustainable Forests, a joint venture between Oak Hill Advisors, L.P. and Bluesource, has purchased 52,000 acres in Upstate New York.

This purchase marks BSFC’s first acquisition since its formation in October 2021, backed by $500 million of capital committed by OHA and its investors.

Bluesource, an experienced and diversified corporate climate adviser, and OHA, a leading alternative investment firm with $57 billion in assets, are partnering on strategic forestry investments.

This initiative seeks to lead the timber industry by example, supporting climate mitigation efforts through sustainable working forest management, according to a media release by project officials.

The Adirondack properties — in Oneida, Lewis and Herkimer counties — were publicly listed for sale, identified by BSFC as an area of interest, and targeted immediately following the formation of the joint venture.

The acquired forestland will add to the nearly 80 North American forest carbon projects covering over three million acres that Bluesource currently manages in partnership with landowners, the announcement said.

“Decades of forestry experience is informing management of the land to balance carbon sequestration as well as overall forest health,” the release added.

In addition, selective logging will allow these forests to continue to support the local economy as working forestland that will produce high value forest products, the announcement said.

BSFC, which is part of the recently merged entity of Bluesource and Element Markets announced in February, will continue to target forestland where selective harvest can prioritize and balance critical carbon capture while maintaining sustainable forest products that local and national communities need to survive and thrive.

While the Adirondack lands have been purchased directly, other future purchases have the potential to become a co-investment alongside traditional timber managers and investors who are willing to engage in climate-oriented forestry practices over other logging methods that cause long-lasting negative ecological impacts, the announcement said.

These investments may take the form of joint ownership, acquisition of timber deeds, or portfolio acquisitions, the media release added.

“These are the kinds of forests that Bluesource Sustainable Forests Company was created to own and manage,” said Jamie Houston, president of BSFC. “Forests with an abundant carbon resource and high value forest products can be challenging to manage solely for one resource or the other. We believe we can unlock substantial value by managing these complicated assets in a thoughtful and sustainable manner for carbon, while selectively managing the timber for the long-term health of the forest.”

Cakey Worthington has been named Director of Operations. Aaron Paul, former Director of Forest Carbon Origination for Bluesource, has been appointed BSFC Vice President.

The team is slated for additional growth over 2022, and BSFC will be targeting talented individuals who are driven to sustainably manage timberlands for carbon and forestry initiatives.

“Bluesource Sustainable Forests Company was created to be a leader in investing in nature-based solutions,” said David Light of OHA. “BSFC’s combination of expertise in the carbon and forestry markets, with flexible capital and structuring expertise, positions us well to acquire a variety of timberlands and manage them in a sustainable manner that promotes carbon sequestration while creating substantial value for our investors.”

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