The new asset class in your Nest pension

What is Timber?  

Put simply, timberland is investing in a piece of land that produces and sells timber. This form of investing has been around for decades in America and, fast forward to 2024, there are now millions of acres of privately owned timberland around the world. These carefully maintained forests act as a renewable source of timber, whilst contributing to the production of raw materials for industries including biomass energy and construction.  

Why did Nest choose to invest in it?  

We’ve partnered with one of the world’s largest timberland fund managers, Campbell Global, to help implement this new asset class. One of Nest’s key investment beliefs is that a diversified portfolio can help offer strong risk adjusted returns, and we hope that the inclusion of timberland will help further diversify our offering. Forestry assets and timber investment strategies have shown to move differently to equity and bond markets. This means that if financial markets experience sharp drops, timberland should be less affected than these traditional types of investments.

In addition to the positive financial benefits, sustainably managed timberland helps conserve forests and their ecosystems. Research has shown that forests can absorb around twice as much carbon from the atmosphere as they emit, making them one of the three main carbon sinks, alongside oceans and soil. Timberland can be an important natural solution to tackling climate change thanks to its environmental benefits.   

Whilst you’re unlikely to see any immediate difference to your Nest pension, the addition of another best-in-class fund manager and asset class means we’re continuing to put your money to work for you. 

Published 08 August 2024