November 10, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

In a move to expand its exposure to global timberland and accelerate its transition toward a goal of Net Zero, the UK’s Essex Pension Fund has made a £100 million (US$116.6 million) anchor commitment to Stafford Capital Partners’ Stafford Carbon Offset Opportunity Fund. 

Founded in 2000, Stafford Capital Partners’ team of 80 global professionals oversees and manages investments in timberland, agriculture & food, infrastructure, and sustainable private equity and private credit.

“We are very grateful to the Essex Pension Fund for its support of the timberland asset class over many years,” said Stephen Addicott, co-managing partner, Stafford Timberland.

“We welcome them into our new carbon offset opportunity fund, a strategy which we feel can make a meaningful contribution to the environment and society.”

Having placed sustainability at the center of its investment process, Stafford has implemented a well-defined ESG program across all its strategies, and since 2010, has committed to the Net Zero Asset Managers initiative.

Five years later, in August 2015, the firm officially launched its global agriculture investment strategy. At that time, the company stated, “We believe the agriculture sector offers an attractive combination of a low correlation with other asset classes and returns based on biological growth, providing income and growth to its investors. Stafford’s strategy will replicate what has worked well for Stafford Timberland team’s investments over many years, with a goal of offering a globally-diversified portfolio of investments across the different forms of agriculture.”

The firm’s Stafford Carbon Offset Opportunity Fund is a new close-ended, 20-year term Article 9 impact fund launched to develop new commercial timberland plantations with the goal of restoring natural forests on a global scale.

With a fundraising target of $1 billion by Q2 2024, the fund will seek to deliver a return from commercial forestry while also supplying carbon credits verified by recognized international standards.

Established goals include:

~ To invest globally in approximately 200,000 hectares of sustainably managed timberland, including in about 150,000 hectares on which new commercially managed plantations will be established and natural forests planted.

~ To generate 30 billion verified carbon offsets for investment, with each offset equivalent to 1 ton of CO2.

~ To be a source of sustainable, low-carbon timberland materials,

~ And, to contribute a significantly negative carbon intensity metric to Essex Pension Fund’s investment portfolio.

Cllr Susan Barker, chairman, Essex Pension Fund Strategy Board and Investment Committee (ISC), said, “The Fund was one of the first LGPS Funds to invest in the timberland sector.  Over the last few years’, significant improvement in our Funding position has allowed us to take the opportunity to implement our medium-term de-risking programme which has resulted in the Fund’s strategic allocation to this asset class increasing from 2-4 percent.”

Barker continued, “The agreement of my fellow ISC members to invest in this fund reinforces our commitment to being responsible investors and the general direction the Fund is taking in regard to our aspirations to have c10 percent of the Fund invested in impactful investment solutions that deliver both positive environmental and social benefits that would not otherwise happen,” concluding, “which not only aligns with our Responsible Investment Policy and priorities, but our commitment to achieving Net Zero targets in the future.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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