September 15, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

UK-based Quilter Investors launched the Quilter Investors Timber Equity Fund as a sub-advised mandate within its WealthSelect Managed Portfolio Service. 

Managed by Pictet Asset Management, the platform will support sustainable forestry companies producing wood-based materials, or companies in the timber value chain that provide biodegradable alternatives to plastics, concrete, or steel. The focus will be on ensuring trees are replanted, forests are nurtured and re-grown, and carbon is captured as part of an overarching mandate to maintain biodiversity.

Excluded will be companies that have exposure above a certain threshold to activities that result in negative impacts on the environment or society – this includes not committing capital in countries lacking strong forest legislation, or where legislation is not enforced.

“We are really excited to be bringing an innovative and genuinely interesting thematic strategy to the WealthSelect portfolios,” said Stuart Clark, portfolio manager, Quilter, WealthSelect. “The timber industry has the potential to touch upon many areas where tackling environmental challenges is becoming an integral focus, be that forest management, packaging solutions or the construction industry.”

Timberland is rapidly gaining credibility as a prime alternative investment for gaining environmental, social, and governance (ESG) benefits for portfolios. As such, demand for these kinds of sustainable alternatives continues to strengthen among the pension and institutional investor space as part of their broader commitments to climate change mitigation and sustainability.

Also driving investment in the space is the UN’s Principles for Responsible Investment forecast that corporate demand for carbon removal and offsetting could represent $800 billion annually for investors by mid-century, along with initiatives such as the universal consideration of the SFI standard, which acknowledges the impact on the use of sustainable forestry practices on the capacity of working forests to sequester carbon and other greenhouse gas emissions.

“When launching the new WealthSelect Responsible and Sustainable portfolios we wanted to ensure that the funds selected aim to maximize return for a given level of risk,” noted Clark. “At the same time, the portfolios seek to maintain a smaller carbon footprint than the reference index, better overall ESG risk management and, in the case of the Sustainable portfolios, supporting sustainable solutions to environmental and social challenges.”

“We have identified a strategy that ticks these boxes and are delighted to be working with Pictet to bring it into the portfolios.”

Dan Franklin, head of UK wholesale, Pictet Asset Management, added, “We are delighted to have been awarded this mandate and share Quilter Investors’ enthusiasm for investing in sustainable solutions. The Timber strategy is an important environmental solution, as Timber is nature’s answer to carbon capture, storage and sustainable alternatives to fossil-based materials.”

“We look forward to working closely with Quilter Investors and delivering them sustainable returns for many years to come.”

~ 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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