FACTBOX-Carbon offsets, wood chips fuel forests interest

Oct 28 (Reuters) - Forests are a growing investment prospect as climate incentives place new value on wood chips and standing trees, say fund managers.

An economic recovery will also drive demand for more traditional products such as pulp and lumber, investors say.

Following is a summary of some recent forest fund-raisings and deals. For a related story double-click here: [ID:nLL495656]

1. Phaunos Timber Fund

Funds: $550 million

Regional focus: owns and manages 17,000 hectares in Brazil, and land elsewhere in East Africa and Uruguay.

Strategy: Plant on grassland sites. Focus is commercial forestry. "Not in the business of carbon" offsets but wood fuel will in the future be a "huge part" of their business.

Expected returns: 8-12 percent annual returns over 5-6 years

2. South Africa's Standard Bank to launch a fund [ID:nSP203884]

Funds: expected A$250 million ($230 million)

Regional focus: Australia

Strategy: sell carbon offsets to companies facing emissions limits under Australia's prospective carbon trading law. Will fund planting and management of 50,000 ha

Expected returns: N/A