Nest branches into timber investing with Campbell mandate

Campbell Global is a subsidiary of JP Morgan Asset Management, after it was acquired by the US investment giant in 2021. It beat competition from 11 other managers that put in tenders.

The new mandate will invest globally, with a focus on the key markets of the US, Australia, New Zealand and Chile.

Nest has been exploring the idea of investing in timberland since 2021. In a statement, it said the investment aimed to provide “stable returns with a cash yield, a natural inflation hedge and portfolio diversification”.

“When managed correctly, timberland investments promote sustainable forestry practices, ensuring the responsible management of forest resources, preserving biodiversity, and maintaining ecosystems,” Nest said.

Stephen O’Neill, head of private markets at Nest, said his team had been impressed by Campbell Global’s “sophistication” and ability to scale and manage costs – a key factor for Nest, which is growing rapidly.

“We believe the importance of preserving natural capital will only increase in the coming years,” O’Neill said. “Many aspects of our ecosystem such as forestry, water and agriculture are closely linked to climate change mitigation and adaptation. Achieving net zero emissions by 2050 will require natural capital preservation.”

Nest has already put money into natural capital through its thematic investment mandate, which was announced earlier this year and is run by Lombard Odier.

John Gilleland, chairman and CEO of Campbell Global, added: “Timberland represents a unique investment that offers Nest’s members the opportunity to combine investment and sustainability goals, which include enhanced portfolio diversification, a hedge against inflation, carbon removal to help mitigate climate change, and the preservation of biodiversity.”

Campbell Global was also appointed to co-manage a timber mandate for for the ACCESS Local Government Pension Scheme pool earlier this year.

Pension investors and advisers are increasingly interested in natural capital strategies such as timberland, according to recent polls.

Nine in 10 people polled by the Society of Pension Professionals said they intended to engage with clients on nature-related risks and opportunities, while just 2% said they did so frequently already.

In addition, the Pensions Regulator has urged schemes to seek to be early adopters of emerging reporting frameworks for nature-based and social risk factors.

Further reading

The increasing appetite for nature-based investment (15 July 2024)

Nest partners with Lombard Odier for thematic strategy (22 February 2024)

Start work on social and nature risks now, TPR urges (21 February 2024)