Can we have our nature and nurture it, too?

There are several reasons why institutional investors should consider natural capital as part of their approach to portfolio diversification. Aside from the observation that agriculture and timberland have outperformed global equities over a longer-term investment horizon, natural capital offers proportionally robust downside protection through an attractive combination of cash yield and capital appreciation. There is also the potential to optimise, withhold or delay returns through control of the harvesting period and value-add projects that enable farmers to expand their holdings and their crop yield, while at the same time reducing dependence on inputs.