By Gerelyn Terzo, Global AgInvesting Media
Timberland is claiming a bigger share of institutional portfolios, drawing investors with inflation hedges, diversification and real environmental impact. Most recently, BTG Pactual Timberland Investment Group, specializing in sustainable timberland management, has secured a $750 million mandate from Nest, the U.K.’s largest workplace pension scheme, to oversee sustainably managed forests across the Americas. This timberland mandate, the second of its kind for Nest, comes on the heels of a procurement process that kicked off in 2023.
As one of the world’s top timberland managers, BTG Pactual TIG oversees $7.3 billion in assets and commitments, spanning 2.9 million acres in the U.S. and Latin America, as of year-end 2024. This partnership highlights BTG Pactual’s growing appeal to institutional investors seeking inflation-hedging assets with strong environmental credentials. It comes amid rising demand for natural capital investments in sectors like sustainable forestry and timberland, which are reshaping traditional asset classes by offering a two-pronged model comprising both financial returns and climate benefits like carbon capture and soil preservation.
Nest Head of Infrastructure & Natural Capital Stephen O’Neill stated, “During the competitive procurement process, BTG Pactual TIG stood out with their strong track record in managing timberland assets at scale while prioritising environmental stewardship. Nest and BTG Pactual TIG share the belief that investing in a sustainable manner can achieve strong risk-adjusted returns.”
Gerrity Lansing, Managing Director and Partner at BTG Pactual, Head of Global Alternatives and the Timberland Investment Group, commented, “We are proud to partner with Nest on this significant mandate. Our collaboration reflects a shared commitment to long-term value creation and sustainable land management. Through this bespoke strategy, we will apply our large-scale timberland platform, on-the-ground expertise and rigorous sustainability standards to seek to deliver financial and environmental outcomes for Nest and its members.”
The deal taps into strong timberland demand, driven by urbanization, a booming population and net-zero goals. Historical data pegs timberland annual returns in the double-digit percentage range (10.7 percent), according to data from Timberland Investment Resources Europe, often beating inflation through natural tree expansion, timber prices and land appreciation. For BTG Pactual TIG, this bolsters its institutional footprint; for Nest, it advances a natural capital strategy aligning pensions with real-world sustainability.
As GAI News previously reported, U.K. pension Nest recently tapped J.P. Morgan Asset Management’s timberland specialist Campbell Global to oversee its inaugural global timberland mandate. Through that strategy, Campbell Global will build and manage a portfolio of direct investments across key forests in the U.S., Australia, New Zealand and Chile. Nest is now deploying timberland, known for its steady returns, inflation hedging and low correlation to traditional asset classes, as a driver of both financial returns and environmental impact.
Institutional investment in timberland has expanded dramatically over recent decades, now reaching well into the hundreds of billions globally, according to Nuveen, reflecting robust cross-Atlantic flows into real assets that deliver both return and impact.
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