South Yorkshire Pensions Authority is investing in UK forestry through a fund managed by Gresham House.
The UK local government pension scheme (LGPS) has committed 拢50m (鈧�58.8m) to Gresham House Forest Fund VI, which aims to generate an 8% internal rate of return through the harvesting and sale of sustainable timber.
Gresham House said the pension fund鈥檚 commitment builds on existing backing for the strategy which is also supported by fellow LGPS Worcestershire Pension Fund and brings the fund鈥檚 size to 拢150m since its launch in March 2022.
The fund manager said further closes are planned, 鈥渨ith institutional investors increasingly recognising the ability of forestry investments to provide compelling financial returns while delivering a positive impact in terms of emissions, biodiversity and job creation in rural communities鈥�.
Olly Hughes, forestry managing director at Gresham House, said: 鈥淲e continue to see strong appetite from institutional investors for forestry investments, and it is testament to Gresham House鈥檚 expertise in this area that South Yorkshire Pensions Authority has chosen to make this significant commitment to Forest Fund VI.
鈥淎s global timber demand continues to rise, we anticipate interest in our forestry strategies will remain strong for the foreseeable future and we look forward to welcoming further investors in due course.鈥�
George Graham, director at South Yorkshire Pensions Authority, said: 鈥淔orestry has an important role to play in our portfolio as we build out our natural capital allocation. Importantly, it offers a resilient, diversified source of returns while supporting our net-zero journey and efforts to combat climate change and support biodiversity.
鈥淕resham House鈥檚 experience and track record in managing forestry assets makes this strategy a natural choice for South Yorkshire Pensions Authority.鈥�
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