Nest, a multi-employer UK pension scheme, has gained exposure to timberland assets through fund manager Campbell Global, JP Morgan Asset Management’s timberland investment company.
The portfolio is global, investing directly in traditional timberland assets in key markets the US, Australia, New Zealand and Chile.
Stephen O’Neill, head of private markets at Nest, said: “We believe the importance of preserving natural capital will only increase in the coming years. Many aspects of our ecosystem such as forestry, water and agriculture are closely linked to climate change mitigation and adaptation. Achieving net zero emissions by 2050 will require natural capital preservation.”
Potential benefits of timberland include stable returns with a cash yield, inflation hedging, and diversification, said Nest.
The scheme also said that when managed correctly, timberland investments promote sustainable forestry practices, ensuring the responsible management of forest resources, preserving biodiversity, and maintaining ecosystems.
O’Neill added that Campbell Global – which was among 12 firms pitching for the mandate – impressed Nest by the sophistication of its operations, responsible investment philosophies, and ability to work at scale to minimise operating costs.
John Gilleland, Campbell Global CEO, said: “Timberland represents a unique investment that offers Nest’s members the opportunity to combine investment and sustainability goals, which include enhanced portfolio diversification, a hedge against inflation, carbon removal to help mitigate climate change, and the preservation of biodiversity.”
