Norway’s KLP and Investinor seed forestry fund with $30m

The pair are targeting the domestic timberland market and will invest venture and growth capital into businesses focused on adding value to forestry exports.

Norwegian pension fund KLP has partnered with asset manager Investinor to launch a NOK300 million ($30 million; €26 million) forestry vehicle.

The fund, called 3K6, will be managed by Investinor and has been equally seeded by the two partners. Norwegian forestry industry stakeholders will contribute assets to the vehicle through Investinor subsidiary and forestry venture capital investor Shelterwood AS.

According to the partners, Norway had the potential add a further $319 billion to its economy through its forestry industry over the last 20 years through added value processing – 3K6 will seek to make investments to facilitate this.

The vehicle will make growth equity and venture-stage investments in forest-related businesses focused on further processing of forests products.

As well as the NOK300 million seed capital, it has also been launched with a portfolio of four companies – the names of the businesses was not revealed.

“Every year, Norway misses out on great value creation because we send untreated timber out of the country,” said Investinor acting managing director Ann-Tove Kongsnes in a statement. “By further processing timber, we can not only create great value, but also contribute to developing industrial workplaces and long value chains in Norway. This is green growth in practice.

“Investinor will build tomorrow’s business world. The goal is to make Norway prosperous and the world greener. Sustainability and digitization create great opportunities for the traditional forest industry. But the need for competent capital and active ownership is great. That is why we are now establishing 3K6 together with leading private investors to ensure long-term industrial ownership and access to capital,” added Kongsnes.

A joint statement from Investinor and KLP cites the growth in sustainable construction and wood’s growing market share in the building materials industry as tailwinds for Norway’s timberland industry and the 3K6 fund.

“At the same time, great progress is being made on the biochemistry and materials side, which means that renewable forest products can replace fossil-based products to a greater extent. This, in combination with increased automation and digitalization, contributes to new market opportunities and increasing demand for the industry,” said the statement.