DC master trust Nest, which now manages more than £31.5 billion in assets on behalf of 12 million members has confirmed that it is on the lookout for one or more timberland fund managers.
While the details and size of the mandate have not been disclosed, Nest, which initially almost invested exclusively in listed assets has over the past two years gradually opened its portfolio to private markets.
It became the first UK master trust to announce mandates in renewable energy infrastructure in 2021 and has also included private equity mandates to its growth portfolios.
Nest CIO Liz Fernando hinted earlier this year that the master trust was now actively exploring allocations to timberland to its portfolio, a process which has now been formalised with the procurement launch on Nest’s in-house tender platform.
Stephen O'Neill, CFA, Nest's head of Private Markets, said: “We’ve been exploring ways to include natural capital investments into our portfolio as we continue to diversify our private markets allocation, take advantage of complex and scarce investment opportunities, and to decarbonise as we move closer to net zero targets. Timberland ticks all of these boxes.
“The performance of timberland speaks for itself. It’s offered stable total returns underpinned by strong cash yields and should play a complementary role in our portfolio alongside our other illiquid investments.
“We look forward to receiving the submissions and seeing how we can open up another asset class for our members.”
Nest’s announcement comes as several of the UK’s local government pension funds and the UK’s Pension Protection Fund (PPF) have confirmed timberland mandates earlier this year.
The £5.7 billion Leicestershire Pension fund has confirmed a £110 million investment spread across two mandates with Stafford Capital and Quinbrook’s Net Zero Power Fund in August this year.
Similarly, the £32 PPF, the lifeboat for UK corporate DB schemes now also holds a £1 billion investment in timberland last year.
