UK local government pension schemes (LGPS) East Riding and West Yorkshire have doubled their investment in Foresight Group’s natural capital strategy to enable the fund to explore further opportunities in the sector.
The LGPS duo have committed an additional £27m (€25.7m) to Foresight Natural Capital (FNC), whose existing portfolio is largely comprised of afforestation projects and established forestry assets.
The latest capital will enable FNC to pursue additional natural capital opportunities such as biodiversity net gain, (BNG) peatland restoration and regenerative agriculture.
The manager said FNC intends to primarily use the new capital for afforestation development. It has already deployed £5m in an afforestation project in South Scotland to accelerate deployment, with a pipeline of further deals, adding that deployment into English BNG projects is also possible.
Once the raised capital is substantially committed or deployed, the strategy will seek further growth opportunities later in 2025, Foresight Group added.
Robert Guest, MD at Foresight Group, said: “We are very pleased to receive these further commitments from our long-standing pension fund investors. It demonstrates that they remain committed to the advancement of our UK platform and see the value that natural capital can generate, not just in terms of returns but for society as a whole.
“It is great to see this continued demand from institutional investors as we look forward to leveraging our deep sector experience for our forthcoming European natural capital strategy.”
Richard Kelly, MD at Foresight Group, said: “The science is clear; there is no credible pathway to avoiding a global climate and biodiversity catastrophe without nature-based solutions. The additional commitment from these high-calibre institutional investors directly contributes towards achieving a nature-positive net zero future and we’re delighted to work with such excellent partners who share our ambition to deliver further growth and impact.
“We see local government pension schemes and the regional pension fund ‘pools’ as key instigators for nature-based solutions.”
Darran Ward, the head of alternatives at West Yorkshire Pension Fund, said: “We view nature as keystone infrastructure and an emerging asset class, producing long-term returns for our members aligned with our core investment beliefs, whilst providing critical ecosystem services essential for sustainable businesses and communities.
“We look forward to working with Foresight as active, engaged shareholders to expand the strategy, drive returns and deliver impact.”
Neil Berry, investment manager at East Riding Pension Fund, said: “As a long-term investor, we are pleased to continue developing our relationship with Foresight in delivering Natural Capital solutions for our members.
“We consider that investment in natural capital solutions provides suitable risk adjusted returns as well as climate change mitigation as part of an overall net zero ambition.”
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