Bank branches out to back forestry fund
The Scottish National Investment Bank has committed £50 million over five years to the creation of new woodland and forestry management in Scotland.
As a cornerstone investor of the Gresham House Forest Growth & Sustainability Fund, the Bank’s capital will support widescale new planting and is predicted to capture 1.2 million tonnes of CO2 over 20 years
It will also target generating stable returns through the sale of timber and the capital growth of land and trees. Any trees harvested by the fund will be replanted and the timber products generated will enable the provision of raw materials for more sustainable packaging and building materials.
The fund will also aim to generate carbon credits in the form of Woodland Carbon Units (WCU) which will create additional value or be used to offset carbon emissions on a voluntary basis.
Eilidh Mactaggart, CEO of the Scottish National Investment Bank said: “The Bank is delighted to cornerstone this new sustainable forestry fund focussed on new and diverse planting in Scotland.
“Gresham House is an experienced forestry fund manager, and we are very excited to support them in this new venture. The new planting element and ability to generate carbon credits represents a novel investment proposition which mainstream investors have yet to fully embrace.
“The Bank’s cornerstone investment is designed to encourage other investors to follow us into this new type of forestry fund. We therefore believe this opportunity to be an excellent fit for the Bank’s ambition to lead the way on innovative mission aligned investments.”
In addition to the environmental benefits tree planting brings for biodiversity, flood defence, improved air quality, reduced soil erosion and outdoor recreation, the investment will also support existing and new jobs in rural Scotland.
Managing roughly 140,000 hectares of forestry worth more than £1.8 billion, Gresham House is the UK’s largest commercial forestry manager. The business also manages a forestry mandate in Ireland and expects to complete on a further international forestry mandate in Australia, subject to regulatory approval.
Olly Hughes, Managing Director, Forestry, Gresham House Asset Management, said: “This impressive first close is a testament to Gresham House’s long-standing track record in the forestry space and the Bank’s cornerstone investment will help to catalyse further investment in this asset class from institutional and private client investors.
“This flexible strategy allows investors to choose to use the carbon credits generated for offsetting purposes or sell the units to create an income.
“As investors increasingly focus on sustainable investments, forestry is emerging as one of the most impactful solutions, which combats climate change and enhances biodiversity, while also serving as an excellent investment diversifier and producing meaningful uncorrelated returns.”
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Notes to editors:
Scottish National Investment Bank
The Scottish National Investment Bank is Scotland’s first development investment bank, wholly owned by the Scottish Ministers on behalf of the people of Scotland.
The Bank is an impact investor, focussed on delivering both commercial returns and mission impacts with its investments. The Bank is a PLC and operationally independent from government.
The Bank invests in business and projects connected to Scotland to deliver long term, patient debt or equity investment where the private market is failing to provide the support businesses and projects require to grow.
The Bank’s missions are:
- Supporting Scotland’s transition to net zero
- Building communities and promoting equality
- Harnessing innovation to enable our people to flourish
The Scottish Government has committed to capitalising the Bank with £2bn in its first 10 years. Over time as the Bank’s initial investments are repaid, the Bank will reinvest those funds in businesses and projects creating a perpetual investment fund to support the Scottish economy in the long term.
The Bank was established in November 2020 and is led by Chief Executive, Eilidh Mactaggart.
About Gresham House Forestry
Gresham House has been managing commercial forestry assets in the UK, Ireland, the Baltics and New Zealand on behalf of a range of investors, including institutions, family offices, private clients and funds for over 40 years and currently manages c.140,000 hectares worth over £1.8bn (as at 31 December 2020).
Our team of 30 dedicated forestry professionals have unparalleled experience and depth of resource in all areas of international forestry investing and carbon markets, including Acquisition, Fund & Client Management, and Asset Management (silvicultural experts).
A Woodland Carbon Unit (WCU) is a tonne of CO2e which has been sequestered in a WCC-verified woodland. It has been independently verified, is guaranteed to be there, and can be used by companies to report against UK-based emissions or to use in claims of carbon neutrality or Net Zero emissions. (from woodlandcarboncode.org.uk)
About Gresham House
Gresham House is a specialist alternative asset management group, dedicated to sustainable investments across a range of strategies, with expertise across forestry, housing, infrastructure, renewable energy and battery storage, public and private equity.
Founded in 1857, Gresham House is one of the oldest companies in London, while our focus is on the future and the long term. Quoted on the London Stock Exchange (GHE:LN) we actively manage c.£4.7bn of assets (as at 30 June 2021) on behalf of institutions, family offices, charities and endowments, private individuals, and their advisers. We act responsibly within a culture of empowerment that encourages individual flair and entrepreneurial thinking.
As a signatory to the UN-supported Principles for Responsible Investment (PRI), our vision is to always make a positive social or environmental impact, while delivering on our commitments to shareholders, employees, and investors.