By Gerelyn Terzo, Global AgInvesting Media
London-based private equity manager Foresight Group, which specializes in natural capital, has raised £27m (US$33.6 million) of fresh equity capital for its Foresight Natural Capital (FNC) fund. The latest investment, which was spearheaded by a pair of U.K. government pension funds, brings FNC’s fundraising tally to £50 million (US$62.1 million). The East Riding and West Yorkshire pension funds doubled their commitments to the fund, the proceeds of which will be directed toward growing and diversifying Foresight’s investment pipeline through its U.K.-focused fund strategy. Foresight Group overees £12.1 billion (US$15.0 billion) in assets under management as of 2024.
West Yorkshire Pension Fund Head of Alternatives Darran Ward commented, “We view nature as keystone infrastructure and an emerging asset class, producing long-term returns for our members aligned with our core investment beliefs, whilst providing critical ecosystem services essential for sustainable businesses and communities. We look forward to working with Foresight as active, engaged shareholders to expand the strategy, drive returns and deliver impact.”
As one of the U.K.’s biggest pension funds, West Yorkshire is no stranger to natural capital. Last year, the fund made a 25 percent venture capital investment into Rebalance Earth, a boutique fund manager focused on nature as an investable asset class. U.K. companies face a rising threat from nature-related threats, including flooding and droughts. Rebalance Earth’s mission is to mitigate these risks through nature-based infrastructure solutions.
Neil Berry, investment manager at East Riding Pension Fund, also weighed in on the FNC investment, saying, “As a long-term investor, we are pleased to continue developing our relationship with Foresight in delivering Natural Capital solutions for our members. We consider that investment in Natural Capital solutions provides suitable risk adjusted returns as well as climate change mitigation as part of an overall net-zero ambition.”
Since launching its U.K.-focused natural strategy five years ago, Foresight has transacted on dozens of properties in the sector. Its portfolio is largely comprised of afforestation, or the planting of trees for new woodland creation, as well as established forestry assets. With the capital from the latest fundraising, Foresight Group will expand its strategy to explore other natural capital opportunities, including peat restoration, regenerative agriculture and projects based in the U.K.’s Biodiversity Net Gain (BNG) rules, per the announcement.
Foresight Group trades on the London markets, and the latest investment brings the net asset value (NAV) of its U.K. natural capital strategy — through which FNC invests — to £300 million (US$373.1 million). Earlier this year, the fund completed a £5m (US$6.2 million) afforestation investment in South Scotland, noting that there is a robust deal pipeline beyond that. Additionally, the firm is looking to leverage its experience investing in U.K. natural capital for a new European natural capital strategy, which is in the works.
Foresight Group Managing Director Robert Guest stated, “We are very pleased to receive these further commitments from our long-standing pension fund investors. It demonstrates that they remain committed to the advancement of our UK platform and see the value that natural capital can generate, not just in terms of returns but for society as a whole. It is great to see this continued demand from institutional investors as we look forward to leveraging our deep sector experience for our forthcoming European natural capital strategy.”
Foresight Group Managing Director Richard Kelly commented, “The science is clear; there is no credible pathway to avoiding a global climate and biodiversity catastrophe without nature-based solutions. The additional commitment from these high-caliber institutional investors directly contributes towards achieving a nature positive net zero future and we’re delighted to work with such excellent partners who share our ambition to deliver further growth and impact. We see local government pension schemes and the regional pension fund ‘Pools’ as key instigators for nature-based solutions.”
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