United Bankers launches UB Nordic Forest Fund IV LP
United Bankers continues to strengthen its forest fund operations by launching UB Nordic Forest Fund IV LP, a new capital fund for professional investors. The fund has sent out its first capital calls and will start investing immediately.
UB Nordic Forest Fund IV will continue United Bankers’ series of Nordic Forest Funds, and will follow an investment strategy similar to those successfully implemented in other United Bankers’ forest funds. However, compared with previous funds, UB Nordic Forest Fund IV aims to increase geographical diversification and invest more widely in forest estates in the Baltic Sea rim countries and certain other European countries. The fund can invest 20 per cent of its capital outside Europe.
UB Nordic Forest Fund IV offers an opportunity to invest in a geographically well-diversified forest property portfolio that generates stable returns independent of the economic cycle. The fund’s forests are managed professionally and responsibly, taking care of their economic, social and ecological sustainability. The sustainability of the fund’s forest management is verified through PEFC and FSC certification.
Forests are well-suited for responsible investment – a well-managed forest serves as substantial carbon storage and as a significant carbon sink. Forests sequester carbon dioxide from the atmosphere and play a key role in achieving the climate targets of the Paris Agreement to reduce greenhouse gas emissions. UB Nordic Forest Fund IV is a fund categorised as Article 9 under EU Sustainable Finance Disclosure Regulation (SFDR) and it aims at mitigating climate change.
UB Nordic Forest Fund IV differs from other Nordic Forest Funds in the sense that it is an evergreen fund. “Previous UB Nordic Forest Funds have been established for a fixed period. However, we felt that an evergreen fund is well-suited for the long-term nature of forest investment. Investors also expressed their wish to continue investing without a time limit. This will facilitate, for example, the activities of many institutional investors that have set long-term environmental or sustainability targets for their investment portfolios,” says Jyri Hietala, CEO of UB Nordic Forest Management Ltd.
Forest investments are considered a key component of a well-diversified investment portfolio, as their correlation with stock and bond market performance is low. The interest expressed by investors towards United Bankers’ forest investment solutions continues to be very strong. Currently, forest investments continue to benefit from high inflation and the long-term positive outlook for the forest industry. The roundwood market in Finland has been at a peak, for example, as timber imports from Russia have ended. This situation is not expected to change in the coming years and substitution demand for timber is expected to continue in Finland and increase for imported timber from the Baltic countries. The output of Finland’s forest industry is also growing due to increasing production capacity. The growth in capacity is, in fact, forecast to compensate for the weak economic outlook.
In recent years, the forest industry has also invested heavily in innovations to replace materials based on plastics and other fossil-based raw materials, increase the added value and more efficient use of the forest industry’s raw material side streams, and expand the use of wood-based materials in various intermediate and end-use applications.
“Our ambitious goal is to develop UB Nordic Forest Fund IV into our largest forest fund ever in terms of capital. This objective is supported by the steady growth in the popularity of forest investment and the broader geographical diversification of the new fund. Our fund has also attracted a great deal of interest from international investors. They are interested in our strong track record in forest investment in the Nordic and Baltic region,” says Timo Ronkainen, Head of Institutional Asset Management at United Bankers.
“In its investment activities in Finland and the Baltic region, UB Nordic Forest Fund IV will continue where UB Nordic Forest Fund III left off after it reached its target size and was closed. UB Nordic Forest Fund IV has the potential to expand direct acquisitions of forest estates into other parts of Europe. We will proceed gradually, starting in Finland and the Baltic region and expanding our geographical allocation into the rest of Europe. Our goal is to be a major player in each of the fund’s selected target markets,” says Jyri Hietala.
“The fund’s investment strategy and performance targets are based on sustainable forest management. We are aiming for actively and well-managed forests and the development of forest properties. An interesting new element in investment activities is renewable energy: its growth prospects also increase the return potential of forest funds. In the future, additional returns on land ownership can be achieved by leasing land for wind and solar power production, for example,” Hietala adds.
UB Nordic Forest Fund IV is the fifth fund established by United Bankers to invest directly in forest estates. In addition to UB Timberland Fund (AIF), which is open to investors, United Bankers has two closed-end capital funds investing in forest estates. UB Nordic Forest Fund II LP invests in forest estates in Finland, and UB Nordic Forest Fund III LP invests in forest estates in the Baltic Sea region. United Bankers’ first forest fund, UB Nordic Forest Fund I LP was sold to a major international insurance company in June 2020.
Following the acquisition of a forest property entity from Taaleri, United Bankers became the third largest private forest owner in Finland at the end of June. Through its funds, the company owns a total of around 145,000 hectares of forest in Finland and around 19,000 hectares in the Baltic countries. Timberland fund operations play a key role in United Bankers’ strategy, and the company has been determined to grow its forest fund family and expand its expertise in the forest sector. Examples of this also include UB Forest Industry Green Growth Fund I LP, a capital fund launched at the beginning of the year to invest in growth companies in the forest and bioproduct industries.
UB Nordic Forest Fund IV is part of United Bankers’ fund selection focusing on real asset investments, which includes real estate and forest funds and funds investing in shares in real estate and infrastructure companies. The Group’s assets under management amounted to around EUR 4.4 billion at the end of 2022, 42 per cent of which was invested in real asset investments.
For further information, please contact:
Jyri Hietala, CEO, UB Nordic Forest Management Ltd
Email: jyri.hietala@unitedbankers.fi
Tel. +358 40 359 3566
Timo Ronkainen, Head of Institutional Asset Management, UB Asset Management Ltd
Email: timo.ronkainen@unitedbankers.fi
Tel. +358 50 66 891
Investor Relations: ir@unitedbankers.fi
United Bankers in brief:
United Bankers Plc is a Finnish expert on wealth management and investment markets, established in 1986. United Bankers Group’s business segments include wealth management and capital markets services. In asset management, the Group specialises in real asset investments. United Bankers Plc is majority-owned by its key personnel and the Group employs 148 employees (FTE) and 32 agents (31 December 2022). In 2022, the United Bankers Group’s revenue totalled EUR 48.6 million and its adjusted operating profit amounted to EUR 16.6 million. The Group’s assets under management amount to approximately EUR 4.4 billion (31 December 2022). United Bankers Plc’s shares are listed on Nasdaq Helsinki Ltd. The Group companies are subject to the Finnish Financial Supervisory Authority’s supervision. For further information on United Bankers Group, please visit www.unitedbankers.fi.
