Australia Wants to Turn Wilderness Restoration Into an Investable Market
Some are questioning whether there will be demand for so-called biodiversity credits
Some are questioning whether there will be demand for so-called biodiversity credits
SYDNEY—Northern Australia’s tropical coast used to have a vast covering of lush rainforest that supported the cassowary, often called the world’s most dangerous bird. Now, one organization is developing a program they say will encourage landowners to reforest the area and create a habitat for native species.
Their plan: Cassowary Credits.
“The idea of the Cassowary Credit was about bringing in the large-scale investment that’s needed to really do that work to protect the valleys of the region from climate change,” said Sarah Hoyal, biodiversity and climate leader at nonprofit environmental group Terrain Natural Resource Management, which wants to sell credits to investors that are valued by how much land is restored to its native state over time.
Australia’s government has similar plans, albeit on a larger scale. On March 29, the government introduced legislation to create a nationwide market for so-called biodiversity credits, the first large advanced economy to undertake such an effort.
Australia is betting that businesses will be hungry to buy credits as they face pressure from shareholders and customers to be more socially responsible. If the market flourishes, Australia could be a model for harnessing money from the private sector to reverse environmental losses, but the plan is facing skepticism from investors and industry groups questioning how the credits will be valued and what will drive demand for them.
“Until there is an economic return, you will not get investors coming to nature projects except on a philanthropic basis, or some early stage voluntary action,” said Martijn Wilder, chief executive of Pollination, an advisory and investment company. The legislation is a good start, he said, but more needs to be done to show it can work.
Australia’s government argues that the plan offers a way for companies to invest in managing the environment without having to buy land. The market will also give landowners extra income, overcoming one of the roadblocks to conservation, and create jobs for indigenous communities that become involved in restoring the land, said Tanya Plibersek, the country’s environment minister.
Under Australia’s scheme, landowners would get a credit, in the form of a certificate, for conducting repair or preservation projects on their property. This credit can be sold on to businesses and individuals. To help these investors figure out how much each credit is worth, information such as how much land is being repaired or how long it will take will be disclosed. The credits would be tracked via a public register and overseen by a regulator.
How Australia tackles these issues could offer lessons for other countries considering ways to prevent nature loss. The U.N.’s environmental arm estimates that $384 billion annually—more than double current levels—needs to be invested by 2025 to protect against climate, biodiversity and land degradation.
Australia’s plan illustrates how some governments don’t think they can fill the funding gap alone and want the private sector to step up. Conservation efforts have largely focused on national parks or wildlife refuges. But with more than 60% of land in Australia owned privately, officials say that is no longer enough.
“We live in the extinction capital of the world—losing more mammals to extinction than any other continent,” said Ms. Plibersek.
The concept of using credits to achieve an environmental goal isn’t new. The European Union and several U.S. states allow trading in carbon credits as part of programs to reduce greenhouse gas emissions. A challenge for Australia’s scheme, however, is figuring out how to value nature itself.
“Biodiversity is inherently more complex than carbon and thus less divisible into interchangeable units,” said Dr. Jody Gunn, chief executive of the Australian Land Conservation Alliance, which represents organisations working to protect nature. “How many koalas is worth a hectare of protected rainforest?”
Some businesses will buy from the market voluntarily when it opens, but it remains to be seen that there will be enough to sustain the market in the short term, she said. That means the government would need to step in and become an active investor, Dr. Gunn said.
Ms. Plibersek said the government hasn’t decided whether to invest in nature projects, but the legislation allows it to do so.
As lawmakers figure out the mechanics of the market, some organisations are plowing ahead with separate plans to develop credits.
Wilderlands, an Australian company, sells credits for several projects, including the rehabilitation of privately owned land in South Australia state that was once used to graze cattle. The purpose of the project is to allow native animals and plants to thrive on the land, and not to use it for agriculture, said Wilderlands, which runs a marketplace for the credits. Buyers of its credits include Lendlease Group, a $3.38 billion Australian construction company, and Monash University, which wanted to showcase efforts to protect nature to its students.
In the northern tropics, much of the coastal lowland habitat of the cassowary has been cleared for farms and the growth of towns. The area is also threatened by cyclones, diseases such as avian tuberculosis and wild dogs. These threats have increasingly driven the bird, which can grow to two meters tall, to higher ground. The cassowary is listed by the government as endangered,
Restoring its lowland habitat will be a slow process. The value of Terrain’s proposed credit is tied to how the rainforest recovers at various points over 25 years. Terrain is developing its credits separately from the government’s effort to establish a national market and is awaiting further details before deciding if its own credits can be part of it.
“It will be 500 years before it’ll look like the rainforest that’s there now,” said Terrain’s Ms. Hoyal. “But it’ll be a substantial habitat at 25 years.”
As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.
Knight Frank’s latest Horizon 2025 update signals renewed confidence in Australian commercial real estate, with signs of recovery accelerating across cities and sectors.
As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.
Family offices are increasingly asserting their dominance in Australia’s private credit markets, particularly in the commercial real estate debt (CRED) segment.
With more than 2,000 family offices now operating nationally—an increase of over 150% in the past decade, according to KPMG—their influence is not only growing in scale, but also in strategic sophistication.
Traditionally focused on preserving intergenerational wealth, COI Capital has found that family offices have broadened their mandates to include more active and yield-driven deployment of capital, particularly through private credit vehicles.
This shift is underpinned by a defensive allocation rationale: enhanced risk-adjusted returns, predictable income, and collateral-backed structures offer an attractive alternative to the volatility of public markets.
As family offices increase their exposure to private credit, the dynamic between managers and capital providers is evolving. Family offices are highly discerning capital allocators.
They expect enhanced reporting, real-time visibility into asset performance, and access to decision-makers are key differentiators for successful managers. Co-investment rights, performance-based fees, and downside protection mechanisms are increasingly standard features.
While typically fee-sensitive, many family offices are willing to accept standard management and performance fee structures when allocating $5M+ tickets, recognising the sourcing advantage and risk oversight provided by experienced managers. This has created a tiered market where only managers with demonstrated execution capability, origination networks, and robust governance frameworks are considered suitable partners.
Notably, many are competing by offering differentiated access models, such as segregated mandates, debt tranches, or tailored securitisation vehicles.
There are important distinctions between onshore and offshore family offices in the context of CRED participation:
Onshore Family Offices: Typically have deep relationships with local stakeholders (brokers, valuers, developers) and a more intuitive understanding of planning, legal, and enforcement frameworks in Australian real estate markets. They are more likely to engage directly or via specialised mandates with domestic managers.
Offshore Family Offices: While often attracted to the yield premium and legal protections offered in Australia, they face structural barriers in accessing deal flow. Currency risk, tax treatment, and regulatory unfamiliarity are key concerns. However, they bring diversification and scale, often via feeder vehicles, special-purpose structures, or syndicated participation with Tier 1 managers.
COI Capital Management has both an offshore and onshore strategy to assist and suit both distinct Family Office needs.
The influx of family office capital into private credit markets has several systemic implications:
Family offices, deploying capital in significant tranches, have enhanced liquidity across the mid-market CRE sector.
Their ability to move quickly with minimal conditionality has contributed to yield compression, particularly on low-LVR, income-producing assets.
As a few family offices dominate large allocations, concerns emerge around pricing power, governance, and systemic concentration risk.
Unlike ADIs or superannuation funds, family offices operate outside the core prudential framework, raising transparency and risk management questions, particularly in a stress scenario.
Yes—family offices are arguably among the most attractive funding partners for CRED managers today. Their capital is not only flexible and long-term focused, but also often deployed with a strategic mindset.
Many family offices now have a deep understanding of the risk-return profile of CRE debt, making them highly engaged and informed investors.
They’re typically open to co-investment, bespoke structuring, and are less bogged down by institutional red tape, allowing them to move quickly and decisively when the right opportunity presents itself. For managers, this combination of agility, scale, and sophistication makes them a valuable and increasingly sought-after partner in the private credit space.
For high-performing CRED managers with demonstrable origination, governance, and reporting frameworks, family offices offer not only a reliable source of capital but also a collaborative partnership model capable of supporting large-scale deployments across market cycles.
Faris Dedic is the Founder and Managing Director of DIG Capital Advisory and COI Capital Management
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