The Scottish Borders Council’s Pension Fund is diversifying its real assets portfolio through an initial investment in Nuveen’s global timberland strategy, with an option to explore opportunities within the manager’s natural capital strategies.
The pension fund, which has committed an unspecified amount to the Nuveen Global Timberland strategy, said it intends to consider ”further allocations across the breadth of Nuveen’s natural capital solutions including both forestry and farmland”.
It said the commitment represents the latest step in the pension fund’s increased drive towards decarbonising its portfolio and seeking investment solutions targeting both positive environmental and societal outcomes alongside attractive and resilient returns.
Nuveen launched the global timberland strategy in 2022 to invest in the US, Chile, Uruguay, Canada, New Zealand and Australia over the long term. The evergreen vehicle targets a net total return of 5-7% pa through the sale of timber, land sales, carbon offsets, conservation easements and natural appreciation of assets, with a targeted cash yield of 2-3% pa.
Councillor David Parker, chair of Scottish Borders Council Pension Fund, said: “The pension fund’s core objective is to provide our end investors with stable returns and we are increasingly putting their capital to work to drive positive environmental and social outcomes.
”The Nuveen Global Timberland strategy and its investment philosophy is fully aligned with these ambitions and will help us in our journey towards a more sustainable portfolio. Moreover, the depth of Nuveen’s overall investment platform, the strategy’s global scope and income profile were key factors in forming the partnership.”
Matthew Hamber, UK institutional business development at Nuveen, said: ”Natural capital solutions continue to be of interest amongst LGPS investors as they seek to decarbonise their portfolios and find solutions to achieve net zero targets.
”Our partnership with Scottish Borders is a major milestone for our Global Timberland strategy and is further indication that UK institutional investors see the full range of benefits of allocating to natural capital as an asset class.”
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