British pension funds allocate £375 million to Gresham House's forestry investment plan
In a significant move for the forestry investment sector, Gresham House's Forest Fund VI has secured commitments from major institutional investors. The fund, which focuses on sustainable timberland investments in the UK and Ireland, aims to deliver long-term financial returns through responsible forest management practices that also generate positive environmental outcomes.
The fund has received a commitment from an unnamed Japanese investor, as well as the UK Local Government Pension Scheme (LGPS) and London CIV, one of the eight investment pools within the LGPS in England and Wales. The Wales Pension Partnership, another group of funds within the LGPS in Wales, has also shown support, with assets totaling £25bn.
Vanessa Shia, head of private markets at London CIV, views forestry as a core asset class and a key pillar of the LCIV Nature Based Solutions Fund. Over the past year, forestry and greenfield assets have been at the forefront of the fund's strategy.
The Gresham House forestry fund's income is derived from sustainable timber harvesting, land value appreciation, revenue from renewable energy development and operation, and sequesters 4.7m tonnes of CO2 over the next 25 years. The fund's investments contribute to rural job creation and local economy sustainment in addition to its financial returns.
Elwyn Williams, chair of the joint governance committee, represents the investing member funds of the Wales Pension Partnership. He commented on the commitment, stating, "We are pleased to support Gresham House's Forest Fund VI, which aligns with our ESG objectives and provides uncorrelated financial returns and measurable environmental benefits, including boosting biodiversity and carbon sequestration."
The first close of Forest Fund VI has been announced, with the internal rate of return reported to be 8%. The fund currently holds 6,000 hectares across 12 properties in Scotland and Wales.
As the world continues to grapple with climate change, investments in forestry funds like Gresham House's Forest Fund VI are becoming increasingly important. These funds not only provide stable returns but also contribute to carbon sequestration, biodiversity preservation, and climate risk mitigation.
For precise performance statistics or verified environmental impact assessments, it is recommended to consult Gresham House’s official fund performance reports and ESG disclosures, public statements or investment updates from the UK Local Government Pension Scheme, London CIV, or Wales Pension Partnership regarding their forestry investments, and industry analyses or independent third-party reports on forestry funds’ climate and financial outcomes.
- The UK Local Government Pension Scheme (LGPS) and London CIV, a key investor in the Gresham House Forest Fund VI, view forestry as a core asset class and a crucial part of their Nature Based Solutions Fund, focusing on forestry and greenfield assets over the past year.
- Elwyn Williams, representing the investing member funds of the Wales Pension Partnership, voiced support for Gresham House's Forest Fund VI, emphasizing that this investment aligns with their ESG objectives, offers uncorrelated financial returns, and provides measurable environmental benefits, including carbon sequestration and biodiversity enhancement.
