ImpactAlpha, January 7 – Hanover, N.H.-based Lyme Timber Company, which invests in and manages forestland for productive but sustainable use, has completed fundraising for its fifth fund. The fund’s $300 million in commitments will be used to invest in rural, low-income communities, “where conservation and economic development go hand-in-hand,” Lyme’s Peter Stein told ImpactAlpha.
Land conservation plays a critical role in the fight against climate change. “Trees have the greatest potential to cost-effectively reduce carbon emissions,” according to a recent climate study, led by the The Nature Conservancy. In the U.S. alone, forestland stores and filters half of the country’s water supply and sequesters more than 15% of domestic carbon emissions.
Making Nature Pay: Bankers Work to Finance Conservation at Scale
Lyme Timber Company has been investing in U.S. and Canadian forestland for more than 40 years, with the aim of ensuring conservation through sustainable use. The company’s primary strategy is negotiating and selling conservation easements, which restrict development and income-generating activities in designated areas. The company claims that roughly 95% of the 1.3 million acres Lyme has invested in to-date will be conserved.
Lyme’s fifth fund will continue acquiring and managing U.S. and Canadian forestland, while also focusing on areas where there is opportunity to drive economic development and jobs. It has done this through past investments, including a 163,500 acre timberland plot in West Virginia where the company is investing in improvements to worker safety practices in an area known for difficult and dangerous logging conditions.
Stein says Lyme has already committed 20% of its fifth fund to investments in northwest Pennsylvania and eastern Tennessee.
Lyme’s investment strategy is drawing increasing attention from institutional investors, who contributed most of the capital to the company’s fifth fund. Impact investors committed 30% of the fund’s capital, compared to Lyme’s $250 million fourth fund, where impact investors invested 50% of the capital.