SLM Partners achieves 40% AUM growth and reveals impact of regenerative managed land portfolio
Asset manager’s first TNFD-aligned report and portfolio-wide carbon accounting reveals 100,000 tonnes CO2e sequestered in 2023 through regenerative management of land for cattle, crops and continuous cover forestry.
Carbon sequestration estimates outweigh carbon emissions in real asset portfolio thanks to regenerative management practices.
SLM Partners grows its assets by 40% as interest in natural capital solidifies, driven by investors seeking unique alpha opportunities and positive environmental impact.
“The environmental, social and economic benefits of regenerative practices are clear. Farmland and timberland must be managed sustainably if it is to deliver sustainable returns to its workers and investors” Paul McMahon, Managing Partner
(London 22/05/2024) SLM Partners, the $610m natural real assets manager with 100% of land under regenerative management, has today published its fourth impact report revealing an estimated 100,000 tonnes CO2e of carbon sequestered in soil and vegetation – equivalent to emissions from 23,000 barrels of oil.
As well as environmental benefits, SLM Partners have found that their regenerative land management can be better for business – delivering an expected internal rate of return (IRR) that is 1-3% higher than conventional farmland investing, as explored in its February White Paper: ‘Investing in Regenerative Agriculture: Reflections from the Past Decade’. Improved returns are achieved through higher yields, lower costs (e.g. reducing chemical inputs), higher prices (e.g. organic premiums), and better risk mitigation to climate change events.
Regenerative strategies are also poised to benefit from the expansion and development of carbon and nature markets that provide an additional lucrative upside. As of December 2023, SLM Partners has sold a total of 1.8m credits through Australia’s regulated carbon credit market.
The report presents quantitative impact metrics that investors can use to work towards their carbon and nature targets, and marks SLM Partners’ first step towards integrating the recommendations of the Taskforce for Nature-related Financial Disclosures (TNFD).
Its first firm-wide carbon accounting effort, quantifying all carbon emissions and sequestration from land that is owned or leased, reveals 100k tCO2e of sequestration in soils and vegetation, which outweighs carbon emissions from land operations and annual carbon credits sales.*
Across 300,000 hectares owned in 2023, 21,000 tonnes of food were produced, including pasture-raised beef, nuts, olives and over ten species of grains, together with 22,000 m3 of timber. 71% of cropland is certified organic or in transition to organic certification, and 62% of forestland is managed under continuous cover forestry – giving increased resilience to a changing climate, and significant biodiversity benefits. Just 0.2% of land was treated with synthetic pesticides.
SLM Partners’ 40% increase in assets under management (AUM) year-on-year from 2022 to 2023 speaks to investor confidence in its approach. It is currently raising capital for three new funds focused on Iberian orchards, Australian farmland and carbon markets, and European forestry.
Paul McMahon, Managing Partner, SLM Partners said:
“The environmental, social and economic benefits of regenerative practices are clear. Farmland and timberland must be managed sustainably if it is to deliver sustainable returns to its workers and investors. For too long, short-termism has driven the degradation of land itself – its soils, its freshwater, its biodiversity – and the healthy ecosystems farmers and foresters rely on to operate land profitably for the long term.
“SLM Partners’ pioneering approach to regenerative land management – embracing ecological approaches such as organic farming and continuous cover forestry, supporting farmers through the transitional phase with long-term flexible leases, and providing training and expert guidance – helps secure value for operators and investors alike. It is time for landowners to wake up to the risk from degradation of their assets and embrace the upside presented by regenerative management.”
Alessia Lenders, Head of Impact, SLM Partners said:
“Built upon primary data directly sourced from farmers, foresters, and esteemed third-party experts such as biologists and soil specialists, the impact results in our latest report showcase the benefits of our investment strategy.
“Our impact reporting process continuously evolves to align with new market standards, most notably TNFD. By piloting the latest sector-specific guidance from TNFD on agriculture and forestry, we aim to offer investors a comprehensive and transparent understanding of both the positive aspects—opportunities and impact—and the potential risks and dependencies, ensuring informed decision-making.”
Notes
*Only land owned by SLM Partners for more than 9 months during 2023 was included in carbon accounting. In Australia, where we manage 284,500 ha in regenerative holistic planned grazing, carbon removal estimates only account for the sequestration that was measured and verified as part of our carbon projects (which covers only 35% of the land). All carbon removal figures are estimated based on the best available or industry-standard models and methodologies. SLM Partners fully acknowledges the limitations of carbon measurement in providing figures reflective of real-world emissions or sequestration and is pioneering work towards improved measurement and reporting.
About SLM Partners
Founded in 2009, SLM Partners is a specialist real assets manager investing in agriculture and forestry. With $610m assets under management, SLM Partners currently manages funds and separate accounts for institutional investors and family offices. Its investment programmes span Europe, the USA and Australia.
SLM Partners invests directly in real assets, namely land, and partners with skilled local operators to build regenerative, resilient and profitable land systems. Its strategies provide investors with the benefits of natural real assets – portfolio diversification, income yield, a hedge against inflation – alongside positive impacts on soil health, water, biodiversity, carbon sequestration, and local communities.
SLM Partners was awarded Real Assets Manager of the Year by Environmental Finance in 2023.