Foresight Group announced that it has further raised £27m of fresh equity capital for Foresight Natural Capital Ltd (FNC). The funds were raised through East Riding and West Yorkshire pension funds. These funds will be diverted toward growing and diversifying the investment pipeline.
Increased Institutional Support and Focus on Afforestation
The latest subscription has increased the support from the two institutional pension funds for Foresight’s current UK focused strategy to double the previous amount. This new capital raises the total net asset value of Foresight’s UK natural capital strategy. The value now stands at £0.3 billion. Foresight has been involved in natural capital initiatives since 2019. It has completed transactions on more than 80 properties in this sector to date.
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FNC’s portfolio mostly entails afforestation and established forestry assets, according to the company statement. Nevertheless, as part of the fundraising strategy, it can now also investigate additional natural capital opportunities. These include Biodiversity Net Gain (BNG) initiatives, peatland restoration, and projects centered on regenerative agriculture.
FNC plans to utilize the funds raised mainly for afforestation development initiatives and has already completed a £5m investment in afforestation in South Scotland this January to accelerate deployment. Additionally, there is a potential for investment in English BNG projects.
The strategy will explore more opportunities for growth in 2025. But for now, the intention is to commit the capital acquired from the January equity rise.
Robert Guest, Managing Director, Foresight Group said, “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.”
He added that they were excited to see continued demand from institutional investors. They also look forward to leveraging their deep sector experience for their forthcoming European natural capital strategy.
FNC’s Role in Climate Action and Future Growth
FNC contributes directly to the battle against climate change and the loss of biodiversity through its initiatives in forestry and afforestation aimed at carbon sequestration. This part of the FNC’s part of a fair land-use transition. The total area of its assets spans 13,245 hectares.
Of this, 5,622 hectares comprise standing forests, which will yield 1.3 million tonnes of sustainable timber during the upcoming rotation. Additionally, 5,819 hectares are allocated for afforestation.
Once fully established, FNC’s afforestation efforts will represent approximately 28% of the total land previously used for afforestation in the UK for the year ending March 2024.