The £11.1bn South Yorkshire Pensions Authority (SYPA) has committed £50m to Gresham House's Forest Fund VI LP forestry fund, the local government pension fund, which is part of the Border to Coast Pool, revealed today.
The fund focuses on sustainable forestry and aims to deliver strong, diversified returns while contributing to emission reductions and biodiversity support.
Launched in March 2022, the Gresham House Forest Fund VI LP offers a portfolio of UK forestry assets, targeting a net IRR of 8%. It generates returns from sustainable timber harvesting and land capital growth. The fund is also projected to sequester 4.7 million tCO2e over 25 years, with investors receiving carbon credits as additional returns.
This commitment follows previous investments from Worcestershire Pension Fund and high-net-worth individuals, bringing the fund's total to over £150 million. Further investments are anticipated as institutional investors increasingly recognise the financial and environmental benefits of forestry investments.
Gresham House oversees £3.5 billion in forestry assets. SYPA's investment aligns with its strategy to build a resilient, diversified portfolio that supports net zero goals and biodiversity, the manager said.
George Graham, director of SYPA, highlighted the importance of forestry for SYPA's growing natural capital allocation: "..it offers a resilient, diversified source of returns while supporting our net zero journey and efforts to combat climate change and support biodiversity" he stressed.
In addition to its investment in forestry, SYPA also also recently acquired a £260m farmland portfolio as part of a joint venture with Royal London Asset Management.
