By Gerelyn Terzo, Global AgInvesting Media
Institutional appetite for European forestry continues to build as investors seek long-term, income-generating assets aligned with sustainability and natural capital themes. Helsinki, Finland-based CapMan Natural Capital has announced the first close of its latest forestry vehicle, CapMan Dasos European Forest Fund IV, in a series of main funds, reflecting robust demand for forestry investment strategies, particularly in Europe, among LPs.
Fundraising remains ongoing, with CapMan Natural Capital setting a new bar on fund size that surpasses the size of previous forest investment vehicles as it looks to scale exposure to sustainably managed timberland and long-term forest value creation.
CapMan Natural Capital Managing Partner Jyri Hietala shared with GAI News, “We are seeing strong interest to natural capital strategies in Europe where institutional investors are increasingly looking for real assets that can deliver both resilient returns and measurable environmental outcomes. CapMan Natural Capital is in a good position with a team of forest investment professionals comprising over 100 years of combined relevant industry experience and a proven track record in sustainable forestry investments across Europe.”
CapMan Dasos European Forest Fund IV is structured as a closed-ended vehicle designed to capture long-term upside through hands-on, sustainability-driven management of European forest assets. The strategy targets net returns beyond 8 percent, with a focus on high-quality forests where active stewardship and asset improvements can strengthen value beyond natural biological growth.
The fund is building a diversified forestry portfolio across Northern Europe, the U.K. and Ireland, regions known for mature forestry markets, clear regulatory frameworks and a proven track record of sustainable forest management. Within these geographies, CapMan seeks to deliver returns through active asset management and the implementation of additional sustainability initiatives that support a dual strategy of financial performance and long-term forest resilience.
CapMan Natural Capital has also pointed to on-the-ground projects across its portfolio that extend beyond timber production alone. One example is a pilot project involving portfolio company Finsilva, which is testing a market-driven model for biodiversity restoration alongside Tapio Palvelut Oy, S Group and LocalTapiola. This project focuses on restoring a 12-hectare peatland site in Pielavesi, creating tradable nature value hectares designed to channel private capital into biodiversity impact without relying on traditional sustainability compensation frameworks.
Of the latest fund IV milestone, Tapani Pahkasalo, Co-Managing Partner at CapMan Natural Capital, commented, “Our investment team has delivered strong results over the years and brings deep experience in the European forestry investments. This experience positions us to deploy capital effectively and to pursue both financial performance and long-term natural-capital outcomes across the Fund’s investments.”
Coinciding with the first close of the new forestry fund, CapMan Natural Capital also marked the other end of the investment lifecycle with a notable exit. The firm is unloading a roughly 24,000-hectare forest portfolio in Latvia and Lithuania from its Dasos Timberland Fund II to the Inter IKEA Group, reflecting more than a decade of active management and value creation. The transaction seemingly highlights how sustainability-led forestry management can translate into tangible value, while freeing up capital and expertise to be redeployed into the next generation of European forest investments.
Hietala further told us, “CapMan Natural Capital’s approach to forestry investments is fundamentally about active management and value creation. By improving forest productivity, enhancing biodiversity and delivering additional carbon benefits through professional forest management, we can generate attractive risk-adjusted returns while directly supporting climate and nature objectives.”
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