Gresham House has announced the final close of its Forest Fund VI LP at £375mn/$500mn, marking both their largest-ever forestry fundraise and what is believed to be the UK’s largest forestry fundraise.
They have raised a total of £375mn for Forest Fund VI LP, with commitments from institutional investors including London CIV, multiple Wales Pension Partnership member funds, and a Japanese investor.
The fund expands on existing support from Local Government Pension Schemes and high-net-worth individuals. The capital raised in the final close will be deployed in a combination of unplanted land for productive woodland creation and established forests across the UK.
Gresham House Forest Fund VI LP is an asset-backed strategy designed to deliver robust, diversified returns for investors as well as sequestering carbon and enhancing natural capital through supporting biodiversity. The current asset portfolio comprises just over 6,000 hectares across 12 properties in Scotland and Wales. With a target net IRR of 8 per cent, the fund generates returns through sustainable timber harvesting and land appreciation as well as having the ability to generate revenue from renewable energy development and operation on the forest sites.
Forestry has delivered strong, risk-adjusted returns over the past four decades, driven by rising land values, increasing timber prices, and continued investor demand for sustainable assets. Unlike mainstream asset classes, forestry remains resilient to macroeconomic cycles, with biological tree growth providing a natural yield. Gresham House Forest Fund VI LP is positioned to benefit from long-term timber price appreciation, in-line with inflation, and government-backed afforestation initiatives that further enhance returns.
Over and above the target core financial forestry returns, the fund will also contribute to carbon reduction, biodiversity preservation and flood mitigation. It is expected to sequester 4.7mn tonnes of CO2 over the next 25 years. Where appropriate, investors in the fund will receive distributions in the form of carbon credits, which maybe sold to provide an additional return or retained for carbon insetting purposes.
Gresham House currently manages £3.4bn in forestry assets, positioning it as the UK’s leading forestry manager and the world’s seventh largest natural capital manager.
Olly Hughes, Managing Director, Forestry at Gresham House said, “This milestone fundraise is a clear reflection of the increasing global recognition of European forestry as a compelling asset class.
“UK and European forestry offers a unique combination of natural capital growth and long-term income streams, underpinned by the biological growth of trees and the security of underlying land ownership. As the transition to a lower-carbon economy accelerates, demand for sustainably sourced timber continues to rise, driven by government initiatives and the growing adoption of wood-based construction materials.
“Gresham House Forest Fund VI LP enables investors to capitalise on these structural trends while making a tangible impact through carbon sequestration and biodiversity enhancement. As the UK’s largest forestry asset manager, and seventh largest globally, we remain committed to delivering long-term value for investors through responsible and sustainable forest investment and management.”