Norway’s Kommunal Landspensjonskasse (KLP) has invested in forestry for the first time, putting SEK250m (€23.9m) into a Swedish specialist fund.
The NOK652bn (€68.6bn) pension provider, which manages the bulk of occupational pensions for the country’s municipalities, announced the investment in Swedish forestry fund Silvestica Green Forest, which is to buy up several woodland assets in Sweden, Finland and the Baltic region.
Harald Koch-Hagen, KLP’s director of strategic asset allocation, said: “This is our first investment in forestry assets.
“Investments in forestry are very long-term and well-suited to KLP’s need for investments with stable, long-term and good returns,” he said.
Koch-Hagen said the pension fund had a strategy of increasing climate-friendly investments, and Silvestica’s sustainable strategy was in line with KLP’s desires and ambitions in this area.
“KLP has the opportunity to increase its stake in Silvestica by making later purchases to bring the investment up to SEK1.5bn,” Koch-Hagen said.
Swedish pensions and insurance group Folksam invested €50m in the fund at the end of last year, as an anchor investor.
Other investors in the fund are Gamla SEB Trygg Liv and Försäkringsbranschens Pensionskassa, KLP said.
Silvestica Green Forest was set up by SEB and CRK Forest Management and registered as an internally-managed alternative investment fund, KLP said.
It will invest directly or indirectly via subsidiaries in forestry companies.
Swedish forestry firms will account for 40% of its investments, with 30% of capital going into Finnish firms and the remaining 30% into companies in the Baltic region.
So far, the fund has signed two deals, and now owns a 17,000-hectare woodland in Finland, bought from UPM-Kymmene, and a 600-hectare forest in Lithuania.
The fund aims to invest in €500m of woodland over the next three to five years.
Koch-Hagen told IPE in an interview earlier this year that the fund was keen to boost real estate investments, but lacked enough good opportunities.