To anyone following Irish forestry, including through The Currency’s coverage, each individual element of the Irish Strategic Forestry Fund (ISFF) announced by Coillte, Gresham House and the Ireland Strategic Investment Fund  (ISIF) last month was nothing new.

Coillte managing forests on private landowners’ holdings? The state-owned forestry company has been doing it since the early years following its establishment in 1989, through partnerships with hundreds of Irish farmers. For the past two years, it has also become an operator of its Nature Trust joint venture, which raises funds from corporations to plant native woodlands.

International investment firms channelling funds into thousands of hectares of Irish forestry, including Gresham House? Again, nothing new – the London-headquartered firm has been managing the assets acquired by AXA from Veon’s Irish Forestry Funds since 2019.

ISIF acting as the cornerstone investor of a fund targeting Irish forestry? A model tried and tested for the past six years under the Foraois Partnership, managed by Finnish forest asset manager Dasos

What is new in the ISFF is that it combines all three elements. In the climate of mistrust and culture wars that has surrounded forestry in rural Ireland in recent years, this unique cocktail of taxpayer and private money, semi-state involvement and land acquisition has made the announcement ideal material for a political football.

From an industry perspective, the most direct criticism came from an open letter signed by representatives of some of the most influential indigenous bodies involved in private Irish forestry including the Irish Farmers Association, the agricultural and forestry consultants’ associations, and the Irish Forestry Owners.

They argued that the ISFF was a first step in “Coillte’s strategic vision to act as an agent on behalf of foreign and national investment funds to transition 100,000 ha of Irish farmland out of local farm ownership for afforestation by funds”. Their main gripe is that the model shifts ultimate profits away from local communities and into the pockets of overseas investors, driving up land prices at the expense of the locals in the process. Instead, they argued for investment funds to become ineligible to forestry subsidies and for Coillte’s own profits and ISIF resources to contribute towards afforestation directly.

There are now three public-private partnerships (PPPs) involving Coillte: farm partnerships; the Nature Trust with Forestry Partners; and the ISFF with Gresham House. To understand why the semi-state has turned to private investors, who they are, and what all parties expect from these deals, The Currency has interviewed senior executives at all three.


Mark Carlin, Coillte’s forestry boss

Mark Carlin has been the managing director of Coillte Forest since 2019. The 100 per cent state-owned company manages 440,000 hectares of its own land, most of which is forests. Carlin confirmed that Coillte has no other forestry public-private partnerships in operation or under discussion.

Following its establishment in 1989, he said Coillte initially planted new trees both on newly acquired land and on the properties of Irish farmers – until its own afforestation programme stopped abruptly. “In 2004, there was a European Court of Justice (ECJ) ruling that Coillte couldn’t avail, as a semi-state, of grants and premiums,” said Carlin. EU-backed grants cover the cost of establishing a forest, and an annual premium reward the owner for the next 15 years – or 20 after this year, if you’re a farmer.

In a way, these subsidies pay forest owners for the services they provide to society, such as sucking carbon dioxide out of the atmosphere. This is why subsidised forestry owners are legally unable to sell carbon credits in Ireland.

“Grants and premiums get you over your hurdle rate,” said Carlin. Without them, there is no commercial return from forestry, he added. Their loss led Coillte to stop planting trees on new land in 2004, but the company accounted for only half of the 15,000 to 16,000 hectares planted annually at that point so there was still plenty of afforestation happening.

Now the annual total has fallen to around 2,000 hectares, just one quarter of the target set in the Government’s Climate Action Plan. “We’re in a crisis,” Carlin says. Coillte’s stated strategy is to plant 100,000 hectares of new forest by 2050, on its own land or with partners, as part of the 450,000 hectares targeted nationwide by the Government over the same period. 

Yet ever since the ECJ’s state aid ruling, it hasn’t made financial sense for Coillte to plant its own new forests. “For us to return to the fold, there are two challenges we had to overcome: access grant and premia; and raise capital,” said Carlin. “The farm partnerships addressed those challenges: the land was there, and farmers had access to grants and premia. They ran successfully for another 10 years,” he added.

I covered the scheme in detail in 2018 for the Irish Farmers Journal and there were around 690 partnerships covering over 12,000 hectares, all contracted between 1993 and 2012. The figures Carlin reports today are virtually unchanged.

The reason I looked into farm partnerships five years ago was that a row had erupted between farmers represented by the IFA and Coillte over profit-sharing. I found no evidence of abuse at the time, but the complexity of individual contracts based on 35 different templates had left some farmers in the dark as to how much they would receive for the trees planted by Coillte on their land or when, and why this was different from their neighbour’s.

Around the same time, Coillte launched a new scheme, Premium Partners, but it never took off. Many farmers were put off by the experience of others, and the licencing system issuing permits to plant, access and fell trees was grinding to a halt amid legal and bureaucratic issues.

Most farmers have stayed away from forestry ever since and the government is only now trying to woo them back by clearing the licencing backlog and introducing a new package of subsidies under the reform of the Common Agricultural Policy (CAP) coming into force this year.

“We wanted to look at more strategic-level partnerships, that’s why we explored the creation of two funds.”

Mark Carlin

Coillte, too, hit the limits of farm partnerships. Managing 690 individual contracts over just 12,000 hectares was “a very onerous model”, Carlin said. “We wanted to look at more strategic-level partnerships, that’s why we explored the creation of two funds.” He does not rule out looking at farm partnerships again, but this does not appear to be a priority for Coillte.

The state-owned company’s new strategy of delivering social and environmental benefits as well as commercial returns from timber means it is now officially shifting towards a model where it will plant 50 per cent of native woodlands, the other half being the high-yielding conifer plantations dominant until now.

“We wanted to attract two investor classes,” Carlin said:

  • environmental, social and governance (ESG)-focused ones, who “look for the woodland credits they can report” – the Nature Trust is for them; and 
  • long-term investors such as ISIF and pension funds, expected to come in through the ISFF and interested in slow, steady returns from timber production along with ESG credentials. Grants and premiums, he said, are essentially paid to local contractors hired to plant and maintain the forests.

Before Christmas, the European Commission published new state aid rules for agriculture and forestry applicable from January 1, to coincide with the new Common Agricultural Policy. The rules are complex and the jury is out as to whether this will allow Coillte to resume subsidised planting on its own land. “It’s very recent, we need to see what comes out of that,” Carlin said.

At a meeting of the Oireachtas Agriculture Committee last week, Sinn Féin TD Matt Carthy grilled Minister for Agriculture Charlie McConalogue on what the Government had done to lift the 2004 state aid blockage and its plans for Coillte’s own afforestation under the new EU rules. “The way we want to go forward is for Coillte to work with the State,” McConalogue replied. “I have asked them to reflect on how we can do that in a way that will work well. We will then look at the state aid to try to make that work.”

Carlin said nothing else. “The first period of Coillte’s afforestation was direct. That would be our preferred model as well,” he said. In the meantime, the launch of the ISFF with Gresham House was “born out of necessity” in the face of urgent climate action targets, he added. “State aid change with Europe can be a slow wheel to turn.”

Asked whether the ISFF was a temporary stop-gap measure before more direct state investment can take place, Carlin did not disagree. If Coillte was cleared to plant new subsidised forestry on its own land, then it could use a whole range of options to raise capital including debt, bonds and retained earnings, he added.

Joe O’Carroll, the fund manager

Joe O’Carroll describes himself as a forester and his career spans public forestry bodies north and south of the border, renewable energy at Gaelectric, a stint advising tech start-ups and a current board seat at the Sustainable Energy Authority of Ireland. Five months ago, he joined Gresham House as investment director of the ISFF. 

Gresham House has been managing old English money for generations. In recent years, the investment firm has expanded into Ireland and its first significant deal here was in forestry. In 2019, Gresham House took over the management of a 4,074-hectare portfolio purchased by French firm AXA Investment Managers from Veon. The Dublin forestry company had assembled the assets for retail investors in its Irish Forestry Funds. O’Carroll said Gresham had since increased this holding to “4,500 hectares or thereabouts”, all under established forestry.

In the past two years, the firm has broadened its presence here through the acquisition of Appian Asset Management and Burlington Real Estate. To grow Gresham House’s presence out of Britain, “Ireland was an obvious place to choose for all of the usual high-level reasons,” O’Carroll said. “But there’s also a personal connection, [chief executive] Tony Dalwood’s mother is from Ireland and he spends most of his spare time down in Cork.”

Now the firm is back where it started in Ireland – investing clients’ funds in forestry.

I met O’Carroll in Appian’s old Georgian office in Dublin 2, now rebranded as Gresham House. Beyond ISIF’s initial €25 million cornerstone investment, he said the €200 million he is confident of raising for the ISFF would come from “pension funds, some endowment funds, charitable organisations and possibly some private clients as well”. The minimum commitment horizon is 15 years, with an option for two five-year extensions.

“They’re all long term funds. Forestry, by its nature is not a get-rich-quick scheme,” O’Carroll said. Typically, this type of investment fund holds assets in perpetuity and any investors exiting after 15 to 20 years are bought out by others, he added.

Coillte is also expected to invest €10 million of its own resources in the ISFF and McConalogue said the Government’s investment advisory agency NewERA was now assessing the plan.

Joe O’Carroll, investment director of the Irish Strategic Forestry Fund at Gresham House.

O’Carroll said the fund has a five-year investment horizon to raise capital and acquire “about 12,000 hectares – obviously, depending on purchase price”. The €200 million fund would average a land price of €16,700 per hectare. When I put it that this appeared to be in a high bracket based on my knowledge of land reports from about one year ago, he insisted that this was the going price now, with some forestry parcels going higher. 

O’Carroll said the buyers paying the highest prices for land at the moment were renewable energy developers and he would stay away from those deals. “On behalf of our investors, we couldn’t justify paying the price that people are looking for, because you would never get a return from forestry paying that price,” he said. “So that’s why I would argue that we’re not the people driving up land prices, Midland prices are going up, they’re up 13 per cent last year, before Gresham was even mentioned in Ireland.”

As someone living in rural Ireland, O’Carroll said he was aware of the growing pressure on land, from farmers being asked to spread livestock numbers over larger areas to comply with nitrate regulations to plans for rewetting bogs, rewilding biodiversity areas and afforestation targets. “We understand all of that but we’re kind of a small buyer in the market, and it’s fairly niche stuff that we’re looking for,” he said.

O’Carroll said the fund would be looking for land nationwide. “We don’t have the price-paying potential for arable land or high-quality grassland. So, we’ll be looking at rough grazing sites. Generally, across the border counties, prices tend to be a little bit more reasonable, but block sizes tend to be smaller,” he said. “We’ll assess every site on its own merits, decide what species we can put in there, project what the revenues will be and that will determine how much we can pay for any given site.”

Some 3,500 hectares will be bare land for new afforestation. “We want to design climate-resilient forests,” O’Carroll said. “We have a tool that was designed by forest researchers in UCD. It looks at site suitability not now, in terms of species, but uses its climate models to project for 40 years and indicate what species will be suitable at that point in time.”

This leaves over 8,000 hectares of existing forests to be purchased by the ISFF, which O’Carroll said would be from mid-rotation to more mature stages in the forestry cycle. “Most of that is going to be forests where a farmer or the previous landowner has already taken all the premiums. They’ve now got to a stage where they say: ‘Okay, now I’ve got an asset, I don’t really know a lot about timber harvesting or timber sales.’ It’s probably the only forest they own or ever will own. So, we’ll try to aggregate that type of material, put a proper harvesting and management plan in place to be able to produce a consistent supply of timber to the market.”

This means taking on the responsibility of obtaining necessary licences and meeting the replanting obligation after trees are harvested.

Coillte’s Carlin said that purchasing existing commercial forests with a mixed age profile was also necessary to attract investors to the ISFF. “You need some near-term cash flow, otherwise there is nothing until you’re in the forest’s 20s,” he said. While Coillte’s objective was the 3,500 hectares of new forests in the fund, the larger purchases of standing trees were needed to bring investors along in achieving this, he acknowledged.

The ISFF has been established as an Irish limited partnership where investors will pool capital. The new entity made its first purchase in December, acquiring a 496-hectare plantation in Castlewaller, Co Tipperary from members of the Coffey family including Angela Coffey, a long-established and leading member of the Irish Timber Growers Association. O’Carroll would not name a price for this first deal and said the ISFF was at the contract stage on several others. “We’re very happy with the amount of suitable sites that are for sale,” he said.

Gresham House’s has been managing AXA’s separate Irish forestry portfolio through an Irish limited company, Forest Clover 1. The company files public annual accounts where anyone can see that AXA is its ultimate parent and its forestry assets have grown from an acquisition cost of €60.4 million in 2019 to an independent valuation of €68.9 million at the end of 2021. The €350,000 annual management fee paid to Gresham House is also clearly reported. 

“One misnomer that’s been out there is the suggestion that we’re getting the grants and sending that back to the UK, that’s not how it works.”

Joe O’Carroll

I put it to O’Carroll that the limited partnership structure chosen for ISFF, with no public filings available, would not allow this level of transparency. He replied that Forest Clover 1 was different because it had a single investor. “Here, there are multiple partners. The limited partnership structure is something that Gresham has used before, it’s a preference of the clients more than it is of us. It’s true to say that from a regulatory point of view, it’s a little bit more straightforward but the limited partnership will still file accounts, so it’s not an opaque structure.”

The ISFF partnership is eligible to grants and premiums, and to the general exemption from income or corporation tax for profits from “the occupation of woodlands,” O’Carroll confirmed – though he pointed out that it is at a disadvantage to farmers, who can now claim premiums for five more years, and to individual forestry owners who enjoy an inheritance tax break.

“One misnomer that’s been out there is the suggestion that we’re getting the grants and sending that back to the UK, that’s not how it works,” he added. “ The grant goes to the forest management company to create the woodland and manage it for four years. That’s the risky stage in terms of pests and vegetation control and things like that. So, the people that put the plants in the ground and do the fencing would be the very same with us as it would be if it was the farmer planting himself or any other private investor.”

Annual premiums, meanwhile, will be reinvested in woodland management, O’Carroll said. “The returns to the investors here really come from long-term growth, it’s biological growth and timber sales.”

O’Carroll said that when Gresham House needed an Irish forestry management partner to run the ISFF because he is the firm’s only sector specialist in Ireland and needs support, from the assessment of every potential site on offer to the stage where trees are planted. Coillte was chosen before his appointment because of its track record and the fact that “they’re probably the only forestry company that has truly nationwide geographic coverage,” he said. 

O’Carroll clarified that both Coillte and Gresham House were service providers to the ISFF, but the partnership did not include a commitment to sell timber from the fund’s forests to Coillte. While he acknowledged that some pulpwood – the lower-quality harvest used to make the like of panelboards – would go to Coillte because its subsidiary Medite Smartply was the largest buyer in the country, “there is no prior agreement”.

John Beckett, the tech sustainability entrepreneur

In light of the publicity that has surrounded the ISFF, the first thing John Beckett said was that “the Nature Trust is completely separate”. Beckett is a tech entrepreneur by day and took it upon himself in 2019 to balance the environmental impact of his Dublin e-commerce company, ChannelSight. 

Since then, his project has evolved into Forestry Partners, a social enterprise helping other businesses plant native Irish woodlands. “Forestry Partners raised money from a couple of dozen funders, typically SMEs, AIB, the Aviation Authority, Guaranteed Irish,” he said. The money they put in was in the tens of thousands of euros, he said.

In 2020, Forestry Partners and Coillte formed a non-profit company called Nature Partners CLG, more widely known under the Nature Trust brand. Beckett said the forestry projects already planted by Forestry Partners then transferred to the Nature Trust, which set a much bigger ambition for itself. The organisation ultimately aims to cover 1 per cent of Ireland’s area, or around 70,000ha, across native woodlands and peatland restoration. This represents substantially all of Coillte’s 2050 target for native woodlands – a type of forest that has no commercial value and is planted to deliver biodiversity, climate and recreational benefits.

John Beckett
ChannelSight co-founder John Beckett. Photo: Bryan Meade

“An organisation will provide funding to us, we buy land in the open market and place it in the CLG in perpetuity,” Beckett said. Although the maximum legal commitment the Nature Trust can offer is 100 years, he added the constitutional objective of the Nature Trust was to hold forests indefinitely.

The non-profit is eligible to receive grants and premia for native woodlands. The Government has made it clear in the past that the carbon stored by subsidised forestry belongs to the state, and Beckett confirmed that investors in the Nature Trust do not receive carbon credits usable to offset their emissions formally. Instead, they get “woodland credits” and annual reports on the status of their forestry for 25 years. “They can claim biodiversity improvements” in their corporate reporting, Beckett added.

When the Nature Trust acquires a site, Coillte ecologist Dr Declan Little asses the biodiversity impact of planned forestry. “He will design a planting programme for broadleaf and native species and seek approvals,” Beckett said. The Nature Trust then plants and manages the woodland, keeping it enclosed for protection from deer for a number of years, though every site will ultimately be open to the public, he added. 

Students supervised by Trinity College zoology professor Yvonne Buckley monitor the sites from the start, Beckett said.

“We are not tied to Coillte and we have worked with a number of other forestry companies.”

John Beckett

Coillte carries out this work, but Beckett said the service-level agreement between the Nature Trust and its co-founding state-owned company was not exclusive. “We are not tied to Coillte and we have worked with a number of other forestry companies,” he said. A video published by the Nature Trust shows private company SWS Forestry planting trees on its behalf in Co Longford. 

Land registry data shows that Nature Partners CLG has so far acquired 110 hectares of land in counties Clare, Leitrim, Longford, Monaghan, Mayo and Sligo. According to Beckett, a lot more has yet to appear in the registry. “We’re acquiring land every week,” Beckett said, adding that the Nature Trust was committed to planting 700 hectares that are fully funded. He expects another funding round to add to this pipeline this year.

Just like other forestry operators, Beckett says the Nature Trust has faced delays in obtaining licences to plant trees and its access to some subsidies is suspended to the European Commission’s sign-off on Ireland’s new forestry programme under revamped Common Agricultural Policy and state aid rules.

When grants eventually trickled through, he said they would be fully reinvested in afforestation, with no possibility for the Nature Trust to pay dividends. 


While not a participant in any of Coillte’s public-private partnerships, the Government looms large over all of them. As Coillte’s sole shareholder, it has responsibility for the semi-state’s financing and strategic choices. As the sector’s regulator, the Department of Agriculture issues the licences McConalogue and his junior minister in charge of forestry, Pippa Hackett, say are no longer stuck in a mountainous backlog – but forestry professionals say still take too long to obtain. And as a constituent of the EU, it conducts the negotiations that shape the Common Agricultural Policy and state aid rules.

Since the launch of the ISFF, cabinet members from the Taoiseach to the minister for agriculture have delivered the same script arguing that planting new forests on the land owned by private investors is “not the Government’s preferred option”. McConalogue and Hackett have attempted to distance themselves from the ISFF, arguing they were not informed of the particular deal between Coillte and Gresham House until after it was done in December, while acknowledging that they were fully aware the semi-state was approaching private investment managers for the previous two years.

Notes of a meeting between Hackett and Coillte on March 3, 2021, obtained by the Irish River Project under Access to Information on the Environment and shared with The Currency, spells it in no uncertain terms: “Use PPP and Coillte investment. Productive forests will be through a forest investment fund but would rely on grants and premiums from DAFM” [the Department of Agriculture, Food and the Marine].

This has been the policy to kick-start an afforestation programme in “cardiac arrest”, in the words of McConalogue. Coillte, Gresham House and Forestry Partners are implementing it through the ISFF and Nature Trust. It may or may not be politically palatable, and the level of transparency in associated strategic decisions is up for discussion – but this is best left for an opinion column. That will be for another day.