Gresham House Forest Growth & Sustainability LP raises £300mn

October 2023

October 2023

Gresham House Forest Growth & Sustainability LP closes with target of £300mn in total commitments raised

Gresham House has achieved the target total commitments of £300mn for its Forest Growth & Sustainability LP following a final close.  The fundraising has been achieved over two years against a three-year target reflecting growing recognition from institutional investors, family offices and private clients of the benefits of forestry as a sustainable natural capital investment.

Since its launch in June 2021, the strategy has attracted commitments from a range of institutional investors, including the Scottish National Investment Bank, the Pension Protection Fund, Worcestershire Pension Fund, East Riding Pension Fund, the National Trust, family offices and private investors.

This strong demand for forestry has been driven by a combination of factors including, long-term stable returns, its potential as a diversifier for portfolios as well as its positive environmental impacts which can align with clients’ net zero objectives. Sustainable forestry value and returns have minimal correlation to bonds and equities, but positive correlation to inflation. Returns are underpinned by the biological growth of the trees, which increase in volume and value annually, removing carbon dioxide from the atmosphere as they grow.

The Gresham House Forest Growth & Sustainability LP invests in a combination of new planting land for woodland creation and established sustainable commercial forestry across the UK. High-quality sustainable opportunities are targeted, generating returns from the sale of timber, the sequestration of carbon (and sale of carbon credits) and the capital growth of the underlying land and trees.

The capital raised in the final close will be deployed rapidly, with a focus on new productive woodland planting schemes as well as the acquisition of existing woodland for the production of sustainable commercial timber, building on the fund’s existing portfolio of approximately 10,000 hectares spread across around 40 properties. Gresham House is the UK’s largest commercial forestry manager and manages c.160,000 hectares of forestry internationally worth over £3.5bn. It recently joined forces with nine other leading forestry companies to launch the International Sustainable Forestry Coalition, a new global initiative aimed at providing effective international leadership to support sustainable forest management as part of the climate transition.

Olly Hughes, managing director, Forestry at Gresham House, says:

“This successful final close is a testament to the proven expertise of our forestry team and the long-term performance across a range of return drivers for the asset class. With growing recognition of the benefits forestry can bring to portfolios in terms of returns, diversification, inflation-protection and environmental impacts, the pipeline of opportunities is strong, and we will now be deploying this capital at pace into new planting projects around the UK.”

Elizabeth Eyre, chair of the Worcestershire County Council Pension Fund Committee, says:

“Forestry has proven a valuable diversifier for our portfolio, while also delivering meaningful benefits in terms of reducing emissions. Gresham House is an established leader in forestry, and we are pleased to have increased our investment in this strategy, which we continue to believe offers compelling long-term returns and real-world environmental and social benefits.”

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