Wales has the institutional capital, the natural assets, and the policy ambition to build a positive feedback loop through local investment, providing a potentially exciting investment opportunity for Welsh institutions, says Olly Hughes, managing director of forestry at Gresham House.
There is a quiet paradox at the heart of institutional and pension investment in Wales. Welsh institutions manage billions of pounds of capital on behalf of Welsh beneficiaries, yet much of that capital is typically deployed thousands of miles from the communities it is meant to serve.
While we often hear of investors’ motivation to deploy capital locally, as noted in the Pensions Investment Review paper in May 2025, local investment pipelines can be hard to access or simply too small to absorb institutional capital at the scale and structure that investors require, so the path of least resistance leads elsewhere: to global equities, overseas infrastructure and international real estate, which results in rural Welsh economies going without the long-term, patient capital they need[1].
This is not a criticism of fiduciary discipline, rather an observation regarding opportunity. In forestry, and natural capital more generally, Welsh institutional investors can access an asset class that is generally considered local, long-term, and capable of delivering economic, social and community benefits that compound over decades in the very places where their beneficiaries live. The challenge is building the bridge between willing investor and investable asset.
The circular capital thesis
Place-based investing – the deliberate alignment of capital with the geographies and communities from which it is drawn – is gaining traction among institutional investors globally[2]. In Wales, we believe, the opportunity to express this principle through forestry is particularly compelling.
Consider the full journey of a Welsh tree: planted on upland low productivity Welsh land and managed by local foresters, it grows over decades, sequestering carbon and supporting biodiversity. When mature, it is felled by Welsh contractors, hauled by Welsh hauliers to a Welsh sawmill, processed into structural timber with the potential to be used to build Welsh homes for Welsh families.
At every stage of this journey, value can be created and retained within Welsh communities: wages spent locally, businesses sustained, supply chains deepened, tax revenues flowing to Welsh public services.
This is what the operational reality of sustainably managed Welsh forestry can look like, and it should be available to Welsh institutional investors.
The social case: jobs, communities and rural resilience
The employment argument alone is striking. Research suggests that sustainably managed forestry generates approximately 30% more employment per hectare than sheep farming – currently the dominant land use across much of upland Wales[3]. Further, the jobs it creates are varied in skill level, spanning forest establishment, silvicultural management, harvesting, haulage, sawmilling, ecological monitoring and business services.
It is important to reference that this is not a binary replacement of other land use, merely a diversification. Sheep farming, for example, is an important bedrock of the Welsh rural agricultural engine, but alternative land use can sit alongside it to increase rural opportunity and economic output.
These are not temporary jobs providing short-lived positions, but multigenerational, skills-based livelihoods rooted in specific Welsh communities where alternative employment is scarce and economic contraction has been persistent[4].
In Llandovery, Llanwrtyd Wells, Llandrindod Wells and the valleys of South Wales, Gresham House’s own Welsh forestry operations currently safeguard approximately 318 jobs across these communities[5]. At scale, a strategic Welsh forestry investment programme could multiply that figure substantially.
Across the UK, the timberland sector contributes approximately £2.8bn in gross value annually and employs around 21,000 people[6]. Wales, with its favourable growing conditions and ambitious government target to plant 5,000 hectares per year of new woodland until 2030[7], can be considered well-positioned to capture a growing share of that economic activity – but only if institutional capital commits to the sector at the scale and time horizon it requires.
Beyond employment: the wider community dividend
The social return on Welsh forestry investment can extend well beyond the employment numbers. Forests can provide recreational infrastructure – walking trails, mountain biking routes, horse-riding paths – that can serve local communities and support the visitor economy.
Gresham House’s Coed Llandegla centre in North Wales is one example: a managed forest asset that draws over 160,000 recreational visitors annually, generating economic activity for the surrounding area year-round[8].
Forests can also contribute to community wellbeing. The evidence linking accessible green space to improved mental health outcomes, including reduced stress, anxiety and social isolation, is now substantial[9].
For rural Welsh communities facing well-documented[10] challenges around geographic isolation and access to health services, a well-managed local forest could be considered a public health asset. If institutional investors support Welsh forestry, they can contribute to sustaining such spaces and in turn the potential wellbeing benefits they provide.
There is an educational dimension that can also be considered. Gresham House’s partnerships with Bangor University and Aberystwyth University have supported hands-on forestry education for hundreds of Welsh students, building the skills pipeline that a growing Welsh forest sector will need.
What Welsh institutions can potentially do that others cannot
Welsh institutional investors can take advantage of certain factors related to Welsh forestry that overseas capital cannot easily replicate: they know the land, the communities, the regulatory environment and the political context. They are able to leverage relationships with: Natural Resources Wales, local authorities, farming communities and also the Welsh Government – relationships on which sustained forestry development often depends.
The Welsh government has committed to planting 208,000 hectares of trees by 2050[11] – an ambition which cannot be delivered by public funding alone. This makes the argument for private institutional capital even more essential, and Welsh institutions, with their long-term time horizons, community mandate and deep local knowledge, could be regarded as being naturally aligned with this asset class, where appropriately structured opportunities can be brought forward.
The opportunity is now
Though the long-term, inflation-resilient characteristics of sustainably managed timber are generally considered widely established, the case for place-based investing in Welsh forestry can offer more than just a financial incentive.
There can also be a strong social and community case: Welsh capital, properly directed, can provide lasting impact for local livelihoods, landscapes, homes and resilience, that can support the circular flow of economic and social value within Wales, connecting local production, processing and use over the long-term.
For Welsh institutions, we believe that Welsh forestry can offer a direct, tangible and community-rich way to align capital with local outcomes.
Gresham House is the UK’s largest private forestry manager, with over 180,000 hectares under management and more than 30 years of active involvement in Welsh forests and communities. For more information visit greshamhouse.com
[1] UK Government Pensions Investment Review, 2025
[2] IPE May/June 2025 edition
[3] Confor, 2014
[4] Welsh Government Timber Industrial Strategy, 2025
[5] Gresham House internal data, 2026
[6] Forest Research, Forestry Statistics, 2025
[7] Welsh Government Woodland Creation Planning Scheme 2025
[8] Development Bank Wales, Oneplanet Adventure case study2026
[9] The Lancet Planetary Health, 2023
[10] Wellbeing of Wales, 2024
[11] Senedd Research, 2025
