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AUM in Action

Nest to Tap Timber with Fund Manager Appointments

Pension scheme Nest has commenced the formal process of appointing one or multiple fund managers to assist its members in investing in timber. According to the 12-million-member pension scheme – which passed £30 billion (US$36.7 billion) in AUM in May – timber is a “well-established” asset class for institutional investors, particularly for US and European pension plans. Earlier this year, Nest and fellow pension scheme Cushon invited fund managers to share views on ways to invest in natural capital, initially focusing on forestry- which was then viewed as an “up-and-coming asset class. Nest noted that investments in timber are “resilient to shorter term-market dynamics”, with returns having a “generally strong correlation” to long term inflation and low correlation with traditional stocks and bonds, helping investment performance even in turbulent markets. Stephen O’Neill, Head of Private Markets at Nest, said: “We’ve been exploring ways to include natural capital investments into our portfolio as we continue to diversify our private markets allocation, take advantage of complex and scarce investment opportunities, and to decarbonise as we move closer to net zero targets. Timberland ticks all of these boxes.” 

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