UK local government schemes are among investors that have backed Gresham House to raise £300m (€347m) for a sustainable UK forestry fund.
Gresham House said the fundraising for its Forest Growth & Sustainability fund received capital commitments from investors, including the Scottish National Investment Bank, the Pension Protection Fund, Worcestershire Pension Fund, East Riding Pension Fund, the National Trust, family offices and private investors.
The capital-raising target was reached two years ahead of the manager’s three-year goal, reflecting growing recognition by investors of the benefits of forestry as a sustainable natural capital investment, the manager said.
“This strong demand for forestry has been driven by a combination of factors including, long-term stable returns, its potential as a diversifier for portfolios, as well as its positive environmental impacts which can align with clients’ net-zero objectives.”
Gresham House Forest Growth & Sustainability invests in a combination of new planting land for woodland creation and established sustainable commercial forestry across the UK. The manager expects to generate returns from the sale of timber, the sequestration of carbon and the capital growth of the underlying land and trees.
Olly Hughes, managing director of forestry at Gresham House, said: “This successful final close is a testament to the proven expertise of our forestry team and the long-term performance across a range of return drivers for the asset class.
”With growing recognition of the benefits forestry can bring to portfolios in terms of returns, diversification, inflation-protection and environmental impacts, the pipeline of opportunities is strong, and we will now be deploying this capital at pace into new planting projects around the UK.”
Elizabeth Eyre, chair of the Worcestershire County Council Pension Fund committee, said: “Forestry has proven a valuable diversifier for our portfolio, while also delivering meaningful benefits in terms of reducing emissions.
”Gresham House is an established leader in forestry, and we are pleased to have increased our investment in this strategy, which we continue to believe offers compelling long-term returns and real-world environmental and social benefits.”
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