Finnish state-owned investment company Tesi, pension insurers Veritas and Elo, together with Sandvik Pension Fund and the Finnish Broadcasting Company’s pension fund have anchored a sustainable forest and bio-based industries fund launched by United Bankers.
United Bankers said the UB Forest Industry Green Growth Fund I (UB FIGG), which has secured €100m worth of commitments, has a €300m target to invest in Europe.
The 10-year fund – which will mainly focus on the Nordics – invests in forest and bio-product industrial companies in the growth phase, but will also consider selected opportunities in industrial project co-investments and buyouts, United Bankers said.
The real-assets manager said the fund invests in companies focused on “plastic and other fossil fuel-based material replacements, higher value and more efficient use of wood and agricultural raw material side streams and greater use of these raw materials across a wide range of intermediate and end uses”.
The UB FIGG has already developed a solid pipeline of potential initial investments, with the first investments expected to be made in early 2023, United Bankers said. UB FIGG is seeking a 15% net return.
Tapio Passinen, investment director at Tesi, said: ”Tesi decided to invest in UB’s new fund as its strategy revolves around forest and bio-based industries as well as fibre-based raw materials, all of which are highly important for Finland.
“The fund is also a way for Tesi to advance sustainable development and responsibility to hinder climate change. There are no market players with a similar profile, either.”
Matti Lehtipuu, managing partner of UB FIGG, said: ”We are very proud of being able to build a unique private equity fund and hire a world-class team to execute a strategy we strongly believe in.
“We would like to thank all our investors for their interest in our fund’s strategy and are excited to help develop the forest and bio-based business opportunities in our region.”
Timo Ronkainen, the head of institutional asset management of United Bankers, said: ”We are very pleased to have raised United Bankers’ first industrial private equity fund. The fund will complement United Bankers’ strong competence in forestry investing and aims to extend our product and service offerings in alternative investments.
“This fund is our first spearhead product in private equity, and it has already achieved a great deal of interest among international investors.”
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