By Lynda Kiernan-Stone, Global AgInvesting Media
Gresham House manages approximately 136,000 hectares of forest land worth more than GBP1.9 billion (US$2.5 billion), harvesting in the neighborhood of 10 percent of the UK’s annual softwood production. The firm is also highly experienced in the creation of new woodland, acquiring 10,000 hectares of unplanted land since 2015, and planting more than 9 million trees in 2020 alone.
By the close of 2020, a boost to the UK forestry market, an uptick in new institutional clients, and recent acquisitions – namely, forestry manager Aitchesse, real asset specialist FIM Services, and Ireland’s Appian Asset Management – drove AUM for Gresham House to increase by a whopping 40 percent to a value of GBP3.9 billion (US$5.5 billion).
Understanding that investing in carbon sequestration by forests is one of the most highly effective strategies to combat climate change, Gresham House, the largest commercial forestry manager in the UK, launched Gresham House Forest Growth & Sustainability strategy in June of this year.
This fund was structured to deliver a “double bottom line” – sustainable capital growth via the creation of more than 10,000 hectares of new productive woodland, as well as through exposure to existing income generating forestry, and the sequestration of carbon to drive the generation of carbon credits.
Distributions to investors will be in the form of verified carbon credits that can be used to offset carbon emissions within their own portfolio or business activities (which also have the potential of increasing in value) or sold to generate income.
By August of this year, Gresh House had raised an initial GBP127 million (US$168 million) from the Scottish National Investment Bank for a first close on the fund.
At the time, Olly Hughes, managing director, forestry, Gresham House, said, “This impressive first close is testament to Gresham House’s long-standing track record in the forestry space and shows clear and growing appetite for the asset class from institutional and private client investors.”
“This flexible strategy allows investors to choose to use the carbon credits generated for offsetting purposes or sell the units to generate income,” continued Hughes. “As investors increasingly focus on sustainable investments, forestry is emerging as one of the most impactful solutions, which combats climate change and enhances biodiversity, while also serving as an excellent investment diversifier and producing meaningful uncorrelated returns.”
As the benefits of forestry as an asset class continue to gain traction with institutional investors, Gresham House recently announced further capital commitments led by Worcestershire County Council Pension Scheme and other private investors that brought its Forest Growth & Sustainability Fund to a second close at GBP200 million (US$265 million).
“Our latest investment in the Gresham House Forest Growth and Sustainability fund will further support our robust approach to diversification across our portfolio and particularly in our private assets,” said Elizabeth Eyre, chair of the Worcestershire County Pension Fund Committee. “In light of strong global timber demand, we recognise the compelling investment case for forestry, as well as the emissions benefits it provides through the distribution of carbon credits.”
Hughes added, “This latest successful close is a testament to continued investor demand for strategies that can deliver genuine diversification and to Gresham House’s long-established expertise in the forestry sector.”
He continued, “As a result of overwhelming investor demand and a healthy deal pipeline, Gresham House have accepted total subscriptions of just over GBP200 million during the year. The acquisitions team is making excellent progress with deployment and a third and final close is expected to take place in the second quarter of 2022.”
– Lynda Kiernan-Stone is editor 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 Oilseed & Grain News. She can be reached at lkiernan-stone@