A London-listed asset manager is offering the opportunity to invest in forests to family offices and other sophisticated investors.

Gresham House is to launch a forestry investment fund for family office, institutional and professional investors.

Advised by the company's subsidiary, Aitchesse, the fund will initially acquire a portfolio of five forests in the west of Scotland, with a total size of 4,880 acres, for £12.1 million ($17.3 million). The fund, structured as a Scottish Limited Partnership, will have a target size of £25 million. 

It will focus on high-yielding Sitka spruce forests of various maturities from new plantings to harvestable woodlands. It aims to provide investors with asset-backed income and prospects of capital growth. The fund will target net annual unlevered returns of 10 per cent after tax.

The portfolio of forests will be acquired from Aitchesse (general partner) by the end of July through a non-refundable deposit of £500,000, half of which will be funded by members of the Aitchesse management team and half by Gresham House. 

Aitchesse, which was acquired by Gresham House in November last year, manages over £200 million invested in around 74,000 acres of UK commercial forestry. It has generated average annual returns of 18.3 per cent across client accounts over the past decade.

“The opportunity to purchase such an attractive forestry asset as the cornerstone investment for the fund is particularly exciting. The fund will be Gresham House’s first new collective investment vehicle investing in forestry, a growing asset class for institutional, family office and professional investors,” said Rupert Robinson, managing director of Gresham House Asset Management.