Norwegian municipal pensions heavyweight KLP has joined forces with private equity firm Investinor and the Nordic country’s forestry industry to launch a new fund targeting business growth for the sector by exploiting opportunities arising from technical and sustainability advances.
The parties behind the new investment fund, 3K6 Skoginvest (3K6 Forestinvest), are KLP, Investinor and Shelterwood – an investment company owned by key players in the forest industry as well as Investinor, according to an announcement yesterday.
KLP and Investinor are to put NOK150m (€12.9m) each into the fund, which will be managed by Investinor – a firm with “extensive experience with investments in the forest sector”, the parties said.
Shelterwood, which invests in forest-related companies in their early growth phase, will contribute assets to the fund.
Sverre Thornes, chief executive officer of the NOK900bn pension provider KLP, said: “Forests are an important natural resource with great potential as a sustainable input factor for value creation.
“We are pleased to be involved in establishing 3K6, which will be a fund that will invest in business development within the forestry sector in this country,” he said.
Ann-Tove Kongsnes, CEO of Investinor, said sustainability and digitisation created great opportunities for the traditional forest industry, but that there was a big need for competent capital and active ownership.
“That is why we are now establishing 3K6 together with leading private investors to ensure long-term industrial ownership and access to capital,” she said.
Norway missed out on great value creation every year because it sent untreated timber out of the country, she said.
“By further processing timber, we can not only create great value, but also contribute to developing industrial workplaces and long value chains in Norway,” she said, adding that this was “green growth in practice”.
The parties said several trends were working in favour of Norwegian forestry – strong growth in sustainable construction, progress in biochemistry allowing renewable forest products to replace fossil-based products to a greater extent, and increased automation and digitalisation.
“In order to exploit the opportunities created by these trends, capital must be made available for profitable investments in the industry,” said Shelterwood chair Anders Øynes.
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