The open-ended fund will harness institutional investor appetite for opportunities that meet responsible investment and environmental, social and governance (ESG) criteria and align with the EU’s Sustainable Finance Disclosure Regulation (SFDR), which integrates sustainability risk considerations into investment decision-making processes.
Storing atmospheric carbon sequestrated by forests into wooden buildings leads to substantial carbon savings compared to normal steel and concrete-intensive building practices.
The fund will target an initial first close of €100m (approximately £85.6m) of committed equity by the end of this year, with a target portfolio value exceeding €1bn (approximately £860m) over the longer term.
“We intend to establish a truly sustainable pan-European fund that’s the first of its kind as a unique offering to investors,” said Pertti Vanhanen, Cromwell’s managing director for Europe.
“An investment in wooden buildings matches the objectives of institutional and other advanced real estate investors who are serious about carbon neutrality and minimising the impact of climate change on our world.
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“This is an exciting opportunity, and we are delighted to be able to partner with Dasos’ highly regarded sustainable timber and biodiversity investment experts.”
Olli Haltia, CEO at Dasos, added: “We have been advising pension funds, family offices and other investors on investing in real assets including timber, land and natural capital opportunities for over 15 years.
“Based on our ongoing market research, we estimate there to be an 8% annual growth within the European market for wooden building projects since 2015.
“This growth is set to continue in line with the market and new regulations strongly supporting the usage of wood, massive timber and other recyclable materials in new real estate projects.
“Our ability to offer, in partnership with Cromwell, the benefits of wooden building technology to a more diverse group of international investors is driven by advances and breakthroughs in engineered wood products (EWP) such as cross-laminated timber, laminated veneer lumber and glulam.”
Cromwell will contribute its real estate investment, fund, asset, project and development management experience to the joint venture and Dasos will offer the timber, land, sustainability and wooden building expertise.
Pictured above: Geologen Trummens Strand in Sweden. Photo credit: Anders Bergõn & FOJAB Arkitekter. Material and expertise delivered by Stora Enso