The Gresham House Forest Growth & Sustainability strategy aims to deliver sustainable capital growth through new productive woodland creation, whilst also providing exposure to income generating existing forestry. Carbon sequestration and storage by forests represent one of the most effective societal investments in tackling climate change.
Returns will be generated through the sale of timber and the capital growth of land and trees from existing forests. Meanwhile, the creation of more than 10,000 hectares of new productive woodland will enable the sequestration of carbon and generation of carbon credits, in addition to delivering sustainable capital growth.
Investors will receive distributions in the form of verified carbon credits that can be retained for ‘insetting’ purposes – to address carbon emissions in their sphere of influence or portfolio – or sold to provide income. These returns provide potential upside from an increase in the value of carbon credits.
Gresham House is the UK’s largest commercial forestry manager, harvesting approximately 10% of the UK’s softwood annually and managing roughly 140,000 hectares, worth more than £1.8bn. Gresham House has specialist expertise in woodland creation and management, having acquired 10,000 hectares of unplanted land for woodland creation since 2015 and has operated and managed similar vehicles for more than 40 years. Gresham House planted more than nine million trees in 2020.
Anthony Crosbie Dawson, Director of Forestry and Private Clients, at Gresham House, says: “The merits of this strategy for investors are numerous. By combining exposure to commercial forestry and carbon sequestration, this strategy offers an opportunity to benefit from capital growth and income generation, whilst meaningfully combatting climate change. Additionally, sustainable forestry offers protection against mounting inflationary pressures, alongside strong portfolio diversification due to its uncorrelated returns.
“By increasing the UK’s forestry stock, we are also contributing to the UK’s natural capital, enhancing the country’s climate, biodiversity and flood mitigation.”
Heather Fleming, Managing Director, Institutional Business at Gresham House, says: “This new strategy launch represents a natural extension of Gresham House’s longstanding expertise managing commercial forestry assets. We expect to see strong interest in this sustainable solution that combines existing commercial forestry and woodland creation, as demand for ESG investments and carbon credits continues to contribute to rising forestry valuations. The flexibility of being able to retain the carbon credits for insetting or selling them for income provides investors optionality dependent on their carbon footprint and return requirements.”
