Gresham House Raises $500 Million to Expand UK Forestry Investment and Carbon Sequestration

Gresham House has successfully closed its largest-ever forestry fund, Forest Fund VI, securing $500 million (£375 million) from a diverse group of institutional investors, including British local government pension schemes and a prominent Japanese investor. This milestone underscores growing institutional interest in sustainable, alternative assets that offer both financial returns and environmental benefits.

Olly Hughes, Managing Director of Gresham House’s forestry division, described the fundraise as a significant indicator of momentum in the sector. “This is the largest fundraise in a single fund that we’ve raised and a signal of the interest and the momentum that’s building around the sector as a whole,” Hughes said. The capital will be deployed to plant and manage new and existing forests across the UK, targeting annual returns of approximately 8%.

The fund addresses a critical strategic need for the UK, which currently imports around 80% of its timber and wood fibre. Forest Fund VI aims to localize timber supply chains, supporting rural economic development and meeting domestic demand for construction and manufacturing materials, all while adhering to sustainable forestry practices.

In addition to its economic and environmental objectives, Forest Fund VI marks a turning point for institutional investors. Hughes noted that the fund has enabled several large-scale UK and international investors to access the UK forestry market for the first time, expanding the reach and impact of natural capital investments.

This development aligns with the Mansion House Accord, a recent commitment from major UK pension providers to increase their exposure to private markets, including investments in natural capital assets. As such, Gresham House’s latest fundraise reflects broader trends toward integrating sustainability with long-term investment strategies.

Overall, Forest Fund VI exemplifies the growing recognition of forestry as a compelling investment opportunity that delivers both attractive financial returns and meaningful environmental impact.