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AUM in Action

UK Asset Owners Back Nature Capital

Appetite for natural capital-focused investments is growing among UK asset owners, with over half already invested or planning to be within the next 18 months. This was evidenced in new research conducted by alternative asset managers Gresham House and mallowstreet, who noted that 73% of UK asset owners would invest in natural capital to support climate adaptation, while 59% would allocate up to 3% of their assets to it. “While there is more work to do to build understanding of natural capital among end investors, the theme is clearly gathering momentum and it is exciting to see that UK asset owners are increasingly aware of the potential to deliver both financial and environmental benefits by backing natural capital solutions,” said Rebecca Craddock-Taylor, Director of Sustainable Investment at Gresham House. Local government pension schemes typically invest in natural capital via illiquid assets, with 33% targeting real assets and 25% allocating to private markets. “It is crucial for asset managers to respond to this growing demand by offering a tailored range of natural capital products that reflect the complex and varied requirements of investors,” said Craddock-Taylor. “This is essential to ensuring that natural capital forms a key part of the portfolios of the future.”

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