LGPS fund commits £25m to nature-based infrastructure fund

West Yorkshire Pension Fund (WYPF) has committed £25m (€29m) to the cornerstone portfolio of a nature-based infrastructure fund to be launched by Rebalance Earth.

The scheme’s investment comes after it acquired a 25% stake in the asset manager last year. 

“As a long-term asset owner, we see place-based, nature-based infrastructure as a key component of strategic investment delivering both resilience and returns,” said Darran Ward, head of alternatives at £20bn WYPF, which is part of the local government pension scheme (LGPS) in England and Wales.

“From peatlands to rivers to oyster reefs, natural infrastructure provides critical services that protect communities and reduce systemic risk. This strategy enables us to invest where it matters most, close to home.”

Rebalance Earth focuses on nature as an investable asset class and aims to raise £10bn for nature-based infrastructure over the next decade.

The new strategy, which aims to raise £150m, will invest in restoring ecosystems such as peatlands, rivers, wetlands, and oyster reefs across Britain and surrounding coastal waters. 

The fund is targeting an internal rate of return of 8-12% over a 15-year period.

Rob Gardner, CEO and co-founder of Rebalance Earth, said: “Nature performs better than concrete at managing water, regulating climate and storing carbon.

“By investing just 2% of a portfolio in nature-based solutions, we can help stabilise the 98% that depends on them.”

Rebalance Earth said its partnership with the LGPS fund set a precedent in the UK, treating ecosystems not as externalities but as fundamental to economic resilience.

“What was once a niche gap in the market is now a timely, scalable opportunity to strengthen portfolios while protecting communities on the frontlines of climate risk,” the asset manager said. 

Financial effects of nature risk

WYPF’s investment comes as nature loss remains a blind spot in many financial models, despite its rising materiality in areas such as water security, climate risk, and supply chain resilience.

According to a recent report by the Taskforce on Nature-related Financial Disclosures (TNFD) and the University of Oxford, the evidence of financial effects of nature-related risks for businesses and the economy is extensive, but company-specific evidence is limited in the academic literature.

It said that the strongest evidence existed for water scarcity, liability, reputational and policy risks impacting firm value, costs, and operations, but that causal chains were rarely mapped and evidence of financial effects at the company level varied by the driver of nature loss.