The gradual emergence of natural capital as a real assets investment segment is gathering pace as institutional investors shift from mere policy disclosures to direct capital deployment. This transition is evidenced by recent fund-level transactions and a growing trend among UK institutions to integrate nature-based strategies into core portfolios.
Investors are increasingly drawn to long-term ecosystem service revenues, with momentum further accelerated by tightening regulatory oversight of nature-related financial risks.UK insurer Admiral followed suit and comnitted to investing in Finance Earth’s Big Nature Impact Fund, which targets woodland, peatland and habitat restoration.
The fund combines public and private capital and is structured to generate returns through carbon credits and biodiversity-linked revenue streams. The vehicle is positioned within a broader effort to scale investment-grade nature restoration assets across land-use markets in the UK.
Earlier in June, Société Générale announced a €100m anchor investment in Ardian’s Averrhoa Nature-Based Solutions fund and confirmed it will also provide structuring and advisory support for the strategy. The bank stated that nature-based solutions require long-term investment frameworks and institutional structuring to scale.
This followed the European Investment Bank committing €50m to Ardian’s Nature-Based Solutions strategy as part of a broader €100m first-close supported by development finance institutions including Proparco and British International Investment. The EIB stated that the investment is intended to mobilise private capital into reforestation and ecosystem restoration projects.
Proparco confirmed its participation in the strategy as part of its natural capital investment activity, with a focus on afforestation, reforestation and mangrove restoration projects with climate and biodiversity outcomes.
These transactions align with themes in IPE Real Assets’ feature ‘Natural capital comes of age’, which examined the development of investment structures targeting biodiversity, ecosystem restoration and land-use change as investable strategies alongside infrastructure and real estate, alongside the gradual emergence of standardised frameworks for assessing nature-related performance and risk.
This activity reflects continued participation from development finance institutions, commercial banks and institutional investors in nature-based investment vehicles structured around ecosystem restoration and carbon sequestration, with capital increasingly deployed through fund structures and blended finance arrangements.
This news briefing was published earlier this week. If you would like to receive it regularly, on your ‘IPE Real Assets profile’, go to ‘My Newsletters‘ and select any from the list.
To read the latest IPE Real Assets magazine click here.
