Why Nature and Forestry Are Becoming Core Capital

Master the Moment and Reach Your Peak with Defoes

"Nature-based capital has grown fivefold in a decade, climbing from $2.8 billion to over $14 billion annually, yet Africa and Asia remain strikingly underfunded despite their strong ecological relevance and enduring structural promise for genuinely patient, well-informed long-term investment capital."

Private capital's relationship with nature has changed shape. What was once a peripheral, values-driven allocation is increasingly viewed by institutional investors as a distinct category of real assets, built on scarcity, income generation and long-term structural demand.

Recent data from Forest Trends and The Nature Conservancy's Gaining Ground report illustrates the pace of that shift. Private capital flowing into nature-based assets has grown roughly fivefold over the past decade, climbing from $2.8 billion in 2016 to more than $14 billion in 2025. The study, which analysed 1,918 investments totalling $62.7 billion since 2016, points to a market moving from niche to mainstream.

For the investor at the centre of this story, an internationally minded family office or wealth holder seeking durable income beyond listed markets, the mission is straightforward: preserve capital, generate reliable returns and diversify from correlated assets. Forestry and nature-based land use offer a route toward that objective, underpinned by finite supply and enduring physical demand.

The obstacle has historically been access. Nature-based assets sit outside conventional portfolios and involve long horizons and cross-border complexity. More than half of the capital tracked in the report went into working landscapes such as sustainable agriculture and forestry, where nature functions as core infrastructure for timber supply, food production and water security, rather than as a standalone environmental cause. These are productive assets with cash flow characteristics, not purely conservation vehicles.

Capital flows remain notably concentrated. Latin America alone attracted over $15 billion of the decade's total, reflecting mature forestry markets and established land tenure. Africa and Asia, by contrast, remain comparatively underfunded despite strong ecological relevance and, in many cases, favourable growing conditions and rising domestic demand for timber and agricultural output. That imbalance signals both a risk to weigh and a longer-term structural opportunity for those willing to evaluate less-crowded markets.

This is where a guide becomes relevant. Specialist platforms and advisers help investors understand landscape quality, land rights, sustainable management standards and the operational realities of timberland ownership, translating a complex, illiquid asset class into a structured proposition. The journey typically follows three steps: understand the asset's fundamentals and risks, evaluate the opportunity against personal objectives and time horizon, then access it through appropriately structured, professionally managed vehicles.

Timberland and working landscapes offer characteristics increasingly scarce elsewhere in portfolios: physical scarcity of land, income potential through timber and agricultural output, and a diversification profile shaped by biological growth cycles rather than financial market sentiment. As global population growth and housing demand continue to underpin timber consumption, forestry's role as productive, tangible infrastructure looks set to strengthen further.

Regulatory momentum adds further texture. As carbon markets mature and biodiversity disclosure frameworks expand across major economies, working landscapes are increasingly recognised for the ecosystem services they underpin, from water regulation to soil health, not just commodity output. Investors should treat such frameworks as context for opportunity rather than guaranteed future value, given that policy and market structures continue to evolve.

The resolution for investors is not a guaranteed outcome but greater clarity: a better-informed view of how nature-based capital behaves, where it is concentrated, and where genuine long-term opportunity may still be underappreciated. The higher purpose is a more resilient allocation, grounded in tangible, structurally supported assets rather than short-term market cycles.

As with all real asset classes, nature-based investment carries specific risks, including illiquidity, valuation complexity and exposure to regulatory and climate variables, and warrants careful due diligence. Past performance of any fund, strategy or asset referenced here does not guarantee future results, and decisions in this area should always be made independently or in consultation with a regulated financial adviser.

Disclaimer: The content provided herein is for general informational purposes only and does not constitute financial or investment advice. It is not a substitute for professional consultation. Investing involves risk, and past performance is not indicative of future results. We strongly encourage you to consult with qualified experts tailored to your specific circumstances. By engaging with this material, you acknowledge and agree to these terms.