NEST, a UK pension scheme, is seeking to appoint timberland managers as part of its plan to invest in natural capital.
The UK’s largest pension scheme by members said following a market warming exercise, it has begun the formal process of appointing one or more fund managers to help its 12m members invest in timberland (forestry).
Stephen O’Neill, head of private markets at Nest, said: “We’ve been exploring ways to include natural capital investments into our portfolio as we continue to diversify our private markets allocation, take advantage of complex and scarce investment opportunities, and to decarbonise as we move closer to net zero targets. Timberland ticks all of these boxes.”
Natural capital investments are those that aim to protect or improve the natural environment, while also generating financial returns for investors.
O’Neill said: “The performance of timberland speaks for itself. It offered stable total returns underpinned by strong cash yields and should play a complementary role in our portfolio alongside our other illiquid investments.
“A core element to this procurement will be getting reassurance from bidders they have a strong focus on sustainable forest management, as well as having enough scale for Nest to maintain a consistent portfolio allocation.”
Earlier this year IPE reported that pension schemes NEST and Cushon were inviting fund managers to share their views on ways they can invest in natural capital, with an initial focus on forestry.
To read the latest edition of the latest IPE Real Assets magazine click here.
