Two UK local government pension schemes (LGPS) have backed Stafford Capital Partners’s debut carbon-offset timberland fund, a vehicle anchored by LGPS peer Essex Pension Fund.

Stafford Capital said the capital commitments from Leicestershire and the City and County of Swansea, together with Essex Pension’s £100m (€113m) investment late last year, gives the Stafford Carbon Offset Opportunity Fund a $242m (€225m) first close.

The fund, launched in December 2022, has a $1bn fundraising target and is expected to invest in around 200,000 hectares of sustainably managed timberland globally, including approximately 150,000 hectares on which new commercially managed plantations will be established and natural forests planted.

Stafford Capital said the fund, which is classified as an Article 9 impact fund under the EU’s Sustainable Finance Disclosure Regulation, remains open to institutional investors during 2023.

Angus Whiteley, CEO of Stafford Capital Partners, said: “It is with great pride that we announce the initial close of the Stafford Carbon Offset Opportunity Fund, a strategy we feel can make a meaningful contribution to the environment and society. We believe this fund will deliver the important combination of potential financial returns and environmental benefit that is so needed today.

We are very grateful to the investors who have enabled us to achieve this milestone and look forward to making a meaningful contribution to their decarbonisation agenda. Throughout Stafford, we continue to align our products to help address these environmental and societal needs whilst delivering the financial returns our clients seek.”

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