Gresham House, a UK-based alternative asset manager, is making a bold move to direct a significant portion of its global forestry funds toward Australia and New Zealand. The firm is planning to allocate up to 40% of its global forest investments into these regions as part of its strategy to capitalise on timberland, afforestation, and carbon-related projects. Tony Dalwood, the CEO of Gresham House, spoke to Agri Investor recently, confirming these plans. “We’ve got very good track records now in Australia and New Zealand,” Dalwood said, underscoring the firm’s solid foundation in the region.
The firm’s increased interest is strongly aligned with the newly established Nature Repair Market in Australia. This market offers investors the opportunity to earn biodiversity credits by supporting environmental restoration projects, further enhancing the sustainability appeal of these investments. Dalwood mentioned that the company is keen on tapping into emerging markets like biodiversity credits, which ties in with Gresham House’s broader sustainability strategy. This strategy, outlined in its 2024 Sustainability Investment Report, emphasises not just carbon forestry, but also vertical farming and habitat banking as pillars of its commitment to what it calls “the sustainability economy.”
Gresham House’s interest in the Nature Repair Market follows the firm’s strategy to engage with natural capital programmes, with Dalwood highlighting that they were keen to learn from other asset managers such as Nuveen, who have already begun to explore these opportunities in Australia. Dalwood expressed that there is a broader cultural shift taking place in the investment world, with more focus on sustainable projects. “It’s about culture,” he said, indicating that such investments require a long-term, integrated approach to environmental stewardship.
Nuveen, another significant player in the market, has also signalled its intent to participate in the Nature Repair Market and is currently in talks with the Clean Energy Regulator in Australia. These conversations are aimed at determining how existing carbon projects can adapt to the new market framework. This growing interest from major players in the sustainability space points to a shift toward more environmentally conscious investment strategies across the forestry and land management sectors.
To strengthen its position in this market, Gresham House appointed former Nuveen senior portfolio manager Eoin McDonald as the head of its sustainability strategy last year. McDonald’s role is key to Gresham House’s focus on identifying projects with strong sustainability outcomes. Dalwood highlighted McDonald’s role in ensuring that each project has its sustainability impact thoroughly evaluated for its additionality and net positive contributions to the environment.
The firm’s upcoming fund is targeting attractive returns of 9–12%, with an eye on capital from institutional investors. These include pension funds, sovereign wealth funds, and family offices who are increasingly looking for opportunities in the growing natural capital markets. Gresham House’s push into sustainable investments in the forestry sector follows its recent analysis of timber markets, which forecast rising timber prices and a looming supply-demand imbalance.
According to the firm’s latest report, the global timber supply is on the brink of a tipping point. The analysis suggests that the global demand for timber is expected to rise sharply, while supply is anticipated to increase at a much slower rate. “From our analysis, future supply is projected to fall short of demand, with the best scenario showing only a 1.1x increase in supply compared to current levels – significantly short of the projected 1.5-1.8x growth in timber demand,” Gresham House reported. The situation could be even worse if the global timber supply stagnates, or worse still, declines due to forest disturbances like wildfires and disease.
This growing demand-supply gap is pushing timber into a critical role as an investment asset. As governments and businesses turn their focus to Environmental, Social, and Governance (ESG) factors, timberland becomes an increasingly attractive option. The intersection of rising demand for carbon credits, sustainable timber, and biodiversity efforts positions Gresham House as a key player in reshaping the future of global forestry investments.
As part of its commitment to environmental restoration and biodiversity, Gresham House will also expand its involvement in carbon forestry. By actively participating in carbon offset programmes, the firm not only supports global sustainability goals but also provides investors with the opportunity to diversify their portfolios with an asset that offers both financial and environmental returns.
With increased focus on ESG-driven investments, Australia and New Zealand are becoming central hubs for this type of growth. Investors looking to align their portfolios with sustainability goals can now look to these regions, which are seeing heightened activity from major asset managers like Gresham House and Nuveen. As the demand for timber and carbon credits soars, these markets are poised for significant growth, benefitting from both government initiatives and private sector investments that prioritise environmental restoration.
In conclusion, Gresham House’s growing presence in Australia and New Zealand reflects the shifting landscape of global forestry investment. The firm’s focus on sustainable timberland management, biodiversity credits, and carbon offset initiatives positions it well for long-term success in a rapidly evolving market. With increased institutional interest and the launch of new environmental restoration markets, the future looks promising for Gresham House and its sustainability-driven investment strategy.
Source- https://woodcentral.com
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