Swedish pensions and insurance firm Folksam is investing €50m in Nordic and Baltic forests via a fund set up by SEB and CRK Forest Management.
Folksam will become one of the two anchor investors, alongside life insurer SEB Trygg Liv, in Silvestica Green Forest, which is intended to grow to €500m over time.
Michael Kjeller, head of asset management at Folksam Group, said: “This investment in forestry assets suits us well and will contribute both to a continued good return for our customers and sustainable development.
“The investment provides us with real assets with a secure and stable cashflow, at the same time as having low correlation with the equities market.”
Silvestica Green Forest will acquire forestland in Sweden, Finland and the three Baltic countries, and will manage the forest holdings responsibly and sustainably to raise values and generate stable yields, Folksam said.
The aim is for Silvestica Green Forest to own €500m of forestland within three to five years, Folksam said.
The forestry fund made its first investment in July, buying around 7,000 hectares of woodland in Finland from Finnish forest industry company UPM.
Folksam said its investment in the fund would be distributed within the group, with life and pensions arm Folksam Liv taking on €22m, pension fund KPA Pension holding €22.5m, and non-life insurance division Folksam Sak holding €5.5m.