Gresham House has successfully closed its largest-ever forestry fund, raising £375 million ($500 million) for Forest Fund VI, with significant investment from major institutional backers, including UK local government pension schemes and an investor from Japan. This remarkable fundraising effort underscores the growing momentum and interest in the forestry sector.
The fund aims to invest in the planting and management of new and existing forests across the UK, targeting annual returns of around 8%. This aligns with investor interest in alternative assets that offer both financial performance and environmental impact. Britain’s reliance on imported timber, with 80% of its needs sourced externally, highlights the importance of localising supply. Forest Fund VI seeks to address this by supporting rural economic growth and meeting domestic timber demands sustainably.
Olly Hughes, Managing Director of Gresham House’s forestry division, highlighted the fund as a pivotal moment for institutional access to forestry investments, enabling larger-scale UK and international investors to enter the market for the first time. This initiative follows the [Mansion House Accord](https://www.gov.uk/government/news/uk-pensions-commit-to-mansion-house-compact-to-boost-uk-economy), signalling a commitment from UK pension providers to increase exposure to private markets, including natural capital.
Over the next 25 years, Forest Fund VI is expected to sequester 4.7 million tonnes of carbon dioxide, potentially generating carbon credits. This creates an additional revenue stream for investors and aligns with the growing appeal to ESG-focused allocators. Elwyn Williams, Chair of the Joint Governance Committee for the Wales Pension Partnership, emphasised the dual benefits of forestry investments: uncorrelated financial returns and measurable environmental impacts, such as enhancing biodiversity and contributing to carbon sequestration.
Key investors in the fund include London CIV, managing assets for several London boroughs, the Wales Pension Partnership, representing regional public schemes, and an unnamed Japanese institutional investor. As UK policy evolves and institutional mandates increasingly focus on sustainability, the domestic forestry market is poised to gain traction, rivalling traditional US forestry investments.
Gresham House’s £375 million raise signals a significant shift in UK institutional capital towards scalable, ESG-aligned forestry investments, offering resilient returns and long-term environmental value.
Read the full story on [ESG News](https://esgnews.com/gresham-house-secures-500m-to-scale-uk-forestry-investment-and-carbon-sequestration/).
