Natural Capital

Forestry

Global forestry expertise delivering long-term value through sustainable timber production and responsible stewardship.

Approach

Forestry as a long-term real asset

Forestry combines the characteristics of a real asset with exposure to biological growth. As a living asset, it offers a return profile that has historically been differentiated from traditional financial markets.

Through sustainable timber production and afforestation, forestry can provide access to multiple sources of value, including timber, carbon credits, natural capital opportunities and underlying land appreciation.

Investment case

The long-term case for forestry

Forestry has proven an attractive real asset for long-term investors. It offers a strong inflation hedge, genuine portfolio diversification and attractive risk-adjusted returns, underpinned by biological growth and the finite nature of productive land.

This is supported by a structural supply gap: timber demand is forecast to grow significantly faster than supply can respond, sustaining long-term value in a naturally appreciating commodity.

Investors benefit from an income stream through timber sales, sustained capital appreciation and increasing ecosystem service revenues, including carbon credits, layered on top of core returns.

Real economy drivers

Why timber demand is increasing

Timber demand is projected to increase by 50-80% by 2050, compared to 2022 levels.

This is driven by structural housing shortages, growing use of timber in construction as a substitute for steel and concrete, and increasing competition for finite, productive land.

By contrast, timber supply is only projected to increase by a maximum of 10% relative to 2022 levels, constrained by slow biological growth cycles and harvest regulation that limit how quickly supply can respond to rising demand.

Global Timber Outlook

Data: FAO STAT, 2024 (Food and Agriculture Organisation of the United Nations)

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A top-three global forestry manager

One global platform, built to acquire, manage and optimise forestry assets across the world’s leading timber markets.

With operations spanning the UK, Ireland, Australia, New Zealand and the United States through Molpus Woodlands Group, our teams bring deep, on-the-ground expertise to every market we invest in.

Supported by over a century of heritage, we bring together investment management, forest operations, land management and nature markets expertise to seek long-term value creation.

Strategies

Forestry solutions

Sustainable International Forestry Strategy

Meeting growing global demand for commercial timber

Investing across the UK, Ireland, Europe, Australasia and the United States, the strategy combines established commercial timberland with afforestation opportunities to access multiple sources of return across global forestry markets.

By focusing on productive forests with strong biological growth potential and long-term land value appreciation, while diversifying by geography, species and asset maturity, the strategy aims to create resilient, long-term value aligned with growing demand for sustainable timber and wood products.

Sustainability

Our commitment to sustainable forestry management

We take our responsibilities for sustainability and governance seriously. We believe responsible forest management is essential to maintaining a sustainable, long-term timber supply and supporting the transition to a lower-carbon economy.

Our forestry investments involve the ownership of freehold land, creating opportunities to sustainably manage and optimise timber production, carbon sequestration and other natural capital outcomes over the long term.

The Gresham House Forest Charter

The Gresham House Forest Charter sets out clear, measurable commitments and targets for sustainable forest management and we seek to apply the highest practical standards of stewardship across our funds.

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Education

Forestry FAQs

Common questions on the investment case for forestry and what sustainable, responsible timber management involves.

What are the portfolio benefits of forestry?

Forestry offers long-term investors a distinct combination of benefits: an income stream from timber sales, long-term capital appreciation and portfolio diversification through low correlation to traditional asset classes. It also provides a degree of inflation protection, as forestry returns have historically tracked or outpaced rising prices.

How is forestry a portfolio diversifier?

Forestry returns are driven by biological growth and land value, rather than the economic cycles that influence equities and bonds. This low correlation with traditional asset classes means forestry can help reduce overall portfolio volatility when added alongside more conventional investments.

Why does timber demand support the case for forestry?

Timber demand is forecast to grow significantly faster than supply can respond, driven by long-run housing shortages, the growing use of timber as a substitute for steel and concrete and increasing competition for finite, productive land. This structural supply gap supports the case for long-term value in forestry as an asset class.

What is sustainable forestry?

Sustainable forest management preserves a forest’s ecological, social and economic value for the present and future. In practice, this means responsibly managing natural resources and forest health while optimising benefits to society, through activities like planting and replanting, pest and disease control, minimising operational impact and consulting local communities.

What is sustainable land management?

Sustainable land management uses land resources to meet today’s needs without compromising the ability of future generations to meet theirs. This means protecting and restoring natural resources like soil and water and balancing environmental, social and economic considerations in how land is used.

Insights 3 min read

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Whether you would like to explore our investment strategies, discuss your objectives or learn more about Gresham House, our team is here to help.

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