How backing solar farms and forests got Gresham House profits growing

Investing in solar farms, property and forests has helped Gresham House profits soar over the past year as the London-listed investor revealed a 35 per cent surge in earnings today.

The London-headquartered alternative asset specialist said this morning that full-year operating profits roared to £27.1m in 2022, up from £20.2m in 2021.

Market swings sparked by war in Ukraine sparked a flood of outflows from many of London’s money managers in 2022.

But Gresham bosses said they had shrugged off the volatility and boosted assets under management by 20 per cent to £7.8bn for the year, with organic growth of £1.1bn from new investors.

Shareholders are also set for a hike in payouts as bosses upped the dividend by 60 per cent to 16p per share. 

Boss Tony Dalwood told City A.M. today the focus on so-called real assets in areas like forestry, renewable energy, sustainable infrastructure and real estate had helped shield the firm from the market volatility.

“It’s clear there are some very significant global macroeconomic issues that are raised now, and were raised 12 months ago pre-war, pre-inflation and pre-market turbulence, but people want to get access to the sustainability agenda and get involved in forestry, energy transition infrastructure, and housing,” he told City A.M. 

“When you look at our investment returns over the long term, and short term, they’ve been good – and people want to get access to that.”

The firm’s forestry holdings has proved a centrepiece of its strategy, with the firm now managing £3.4bn worth of forests across the UK, Europe and Australasia, making it the country’s largest forestry asset manager.

Bosses are also now eyeing a further international push after a flurry of deals in Australia, New Zealand and Ireland across its forestry and real estate divisions in 2022. 

“Our five year plan was to go international and last year, we made further strides into Ireland, strides into New Zealand and Australia,” Dalwood told City A.M. 

“So we really are making good strides to achieve that, to put Gresham House on the map as a brand internationally as well.”

Gresham said it was also now ramping up its equity investment in small and medium-sized firms as it looked to capitalise on a plunge in valuations over the past year. 

“We’re investing in that area, and we’re investing in people in that area. When you have these sort of dislocations or weaknesses in your capital markets, this is the opportunity to invest,” Dalwood said.

Gresham recorded positive flows into its equity strategies at a time when “many investors have been negative on UK equity markets”, he added.