Nest, the UK's largest DC master trust, has selected Campbell Global, a timberland investment advisory firm under J.P. Morgan Asset Management, to manage its first timberland portfolio.
Campbell Global will manage a global portfolio of direct investments in timberland, identifying investment opportunities fo in key markets such as the US, Australia, New Zealand, and Chile, Nest confirmed.
The partnership aims to focus on sustainable forestry practices, ensuring responsible management of forest resources while promoting biodiversity and maintaining ecosystems.
The appointment comes as DC providers in the UK are facing growing calls to diversify their portfolios, which have historically been predominantly invested in index tracker funds focused on equities. Nest has been among the first DC providers to confirm significant allocations to private markets, including investments in private equity and private credit announced in 2022. It also integrated renewable energy infrastructure into its portfolio through a collaboration with infrastructure manager GLIL.
Since the introduction of automatic enrolment, Nest’s assets have grown to more than £40bn which are invested on behalf of more than 12 million members, making it the largest UK pension scheme by members.
Timberland investments are increasingly recognised for their environmental benefits, including carbon capture, water filtration, and habitat preservation, alongside their economic advantages like stable returns, inflation hedging, and portfolio diversification.
Stephen O’Neill, head of Private Markets at Nest highlighted that Nest as a rapidly growing fund had been on the lookout for a manager that was able to scale up its timberland investments.
“We believe in Campbell Global we have found a partner that can grow alongside Nest, meeting our high bar for responsible investing – they’ve demonstrated they want to be good stewards of the environment and the forests, and the communities around the forests.
“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” he predicted.
The appointment of Campbell Global follows a procurement process announced at the beginning of this year, some 12 fund managers had applied for the mandate, Nest said.
