Foresight Group’s UK natural capital strategy has sold a Welsh afforestation project, achieving a 15.5% internal rate of return over a 4.75-year holding period.
Foresight Natural Capital (FNC) said the sale of Banc Woodland, an early-stage forest in Carmarthenshire, “marks a highly profitable milestone for the strategy and provides clear evidence of the commercial viability” of Foresight’s afforestation model as a nature-based investment opportunity.
FNC did not disclose the sale amount but said the transaction generated a 1.8x multiple on invested capital, adding that the proceeds from the sale will be reinvested into the next wave of woodland creation.
The Banc Woodland project, acquired in 2021 and planted in 2022, transformed grazing land into a productive forest asset and included 16,550 Woodland Carbon Code units.
Robert Guest, co-lead of Foresight Natural Capital, said: “Banc sits at the front of our pipeline of woodland creation assets. We’ve seen strong competitive interest in the sale, allowing us to crystallise development value for our investors ahead of schedule.
“The impressive tree growth rates achieved within just three years are reflected in the value per hectare. We’re also pleased to see increasing price recognition for our Woodland Carbon Code units, reflecting growing market confidence in the scheme’s credibility and the value of sequestration projects.”
Richard Kelly, co-lead of Foresight Natural Capital, said: “This is an important milestone for Foresight Natural Capital. It validates our proactive development business model and demonstrates that we can achieve strong returns, even in a high interest rate environment, whilst in parallel making a direct contribution to the fight against climate change and biodiversity loss as part of a Just Transition.
“With the UK’s structural timber supply shortage and rising demand for high-integrity carbon credits, we are excited to build on this first successful exit.”
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