CapMan Oyj (CAPMAN) Earnings Call Transcript & Summary

Good morning, and welcome to this joint press conference together with CapMan and Dasos Capital. My name is Linda Tierala, and I'm Director of Investor Relations and Sustainability at CapMan. Today, we have presenting Pia Kall, who is the CEO of CapMan, and Olli Haltia, who is the CEO and senior partner of Dasos Capital. After the presentation, Pia and Olli will answer questions from the viewers and the audience. And if you would like to ask a question, you may do so through the chat box on the webcast page. And you may ask a question at any time during the presentation and Pia and Olli will answer the questions after their remarks. And now with these formalities underway. I'll hand over to Pia and Olli for the presentation.

So good morning also on our behalf, and it's really great to be here today to share these exciting news that we are turning forces CapMan and Dasos Capital to really accelerate the natural capital investing. I'll start with some transaction highlights. So first of all, Dasos Capital is really the leading player when it comes to natural capital and Timberland investing. This means that together, we can establish a new investment area within CapMan, in natural capital. And this is also for CapMan a strengthening of our real asset investment strategies, which are after this 80% of our assets under management. The strategic fit is perfect. Dasos supports us both on our vision to be the most responsible Nordic private asset house. And it's also a significant step for us on our growth target to reach EUR 10 billion assets under management. We have together identified several different areas to accelerate growth within Dasos investment areas and also combining our capabilities, expanding the product offering within natural capital. And this is creating shareholder value. If the acquisition would have been done in the beginning of 2023, it would already have been EPS positive. A bit more details on Dasos Capital. So Dasos is really the European and even on a global scale, leading company within natural capital biological growth investment and climate change mitigation. Dasos was founded in 2005 and currently manage 7 active funds with a global investment mandate and at the moment, a pan-European investment portfolio. That means that there are 200 -- almost 270,000 hectares of land in their portfolio, which makes Dasos one of the largest land owners. Their track record is stellar. The average net returns in their funds over the last 15 years has been above 10% net IRR. And it's not only stellar returns, it's also sustainability and climate change abatement. So annually, the forest that Dasos have in their portfolio is sequestrating a total of 1.5 million CO2 ton equivalent. This means that it's roughly 0.5 million cars, annual emissions that are offset. All of the investments into certified or certifiable forests and with a really strong focus on sustainable nature-based strategies means that this is a one-to-one fit with what we are looking for in CapMan as well. If we look at Dasos compared to their competition, this is really the player with both when you look at the portfolio size in hectares and when you look at the investment portfolio mandate and the geographical spread, clearly the outlayer in the industry with being one of the pioneers and keeping that pioneer status throughout their development journey. And I'll hand over to Olli to tell a little bit more about Dasos team and investment strategy.

Yes. The team is something we have had together a long time, we all know -- knew each other before Dasos, which was established in 2005, and we started the launch of the first fund 2009. And all these years, we have been working together. Before Dasos time we worked all of us with international forestry. So we are far beyond European borders, Latin America, Africa, Asia. So in the Dasos context, we have been able to benchmark all European forest projects in a global context. This is really a tip of iceberg a trend because this organization and our forest assets, they employ about over a year, about 300 field foresters which are the best local experts. And really, although it's fair to say that there is a lot of experience and knowledge in the team with the quality represented here on the slide, the most important skill is to know who knows better. And that's really the key for the success. So -- regarding the market, one -- the very first important point is the resource scarcity. If you look at the forest area per capita today and compared to early 1960s, we have per capita about only 1/3 of forest area remaining. This is due to a couple of issues. One is, of course, deforestation, very much discussed. But the other more important issue is actually population growth. But -- this is perhaps the ultimate reason that we speak so much about forests. They are increasingly scarce. In a European context, we have planted lot of trees over the past decades, especially here in the Nordics and the scarcity is represented by a little bit differently. But here, if you compare a GDP level to forest cubic meters or for a stock forest area, you still note the same trend for increases scarce. With the foresters scarce, then there's a growing demand. So United Nations FAO put -- published recently a forecast about wood consumption up to 2050. They forecast over 40% increase for wood driven by tissue packaging, wood-based construction and fundamentally various applications, which replace fossil-based materials such as plastics in various fields. So increase in wood. On the other hand, the scarcity is not only for wood. Forest land is also used for various new applications. And the example here is about renewable energy, so -- which represents an important additional revenue stream for the years to come and already today. We have on Dasos land today about 5 gigawatt renewable energy projects signed or in the pipeline, which is about more than 300 wind turbines and perhaps about total 4,000 hectares of solar parks, which if we place those on our lands, it will be rather on the [ beat ] production sites than the old beat production sites and open areas not on forest land per se. But then when will these wind turbines, that has a sort of trade-off in terms of sustainability, which is an important driver for forestry as well because we need to allocate forest land more for consideration and biodiversity management in future. And the most recent trend is to compensate for nature loss for wind, especially for wind, which is not causing not so much forest loss, but perhaps a little bit more by the still loss and if you really want to produce green energy, there has to be some sort of a compensation. This is an increasing trend for future. Okay. Okay. Then regarding value creation. So as Pia mentioned, we have been able to generate a little bit more than 10% IRR over the 15 years lifetime of Dasos, which is, I believe, more than most people would expect for forestry. This requires some -- perhaps some careful looking into details. So it's good to note that if you -- normally talks about biological growth. Biological growth and wood price increase, land value appreciation, they have good start. Wood prices increased because inflation, land value may increase because of scarcity. And so -- but at the end, the return is made by pretty normal value creation means which are very familiar in the private equity segment. And if the suspension a couple of them. One is buy-and-build. So what we do is that we try to establish scale economies for forestry, for harvest, for forest management, for conservation and also for renewable energy. So this is implemented by consolidating fragmented assets into bigger entities and which will lower unit costs. I already mentioned ecosystem services, one of the trends is now to compensate various nature loss causing activities for excellent construction. What we have been doing is we've been developing sort of habitat bank, putting aside and identifying valuable environmental habitats which are available for compensation. And putting all this together at the end, over time, generate substantial additional value beyond biological growth.

Thank you, Olli. And putting these 2 things together, what we soon realized when we started discussions, Olli and myself and CapMan and Dasos was really that this is an excellent strategic fit from both perspectives. So for CapMan, this is really an important step for us to support our sustainability ambition and to become the most responsible Nordic private asset house. It is also a way for us to accelerate our growth towards our growth target of EUR 10 billion assets under management. It allows us to expand into natural capital and Timberland investment as a new investment area with attractive growth potential, as Olli just went through and it's also strengthening our focus on real assets where real estate and infrastructure have already for several years, been our largest investment area measured in assets under management. And with natural capital complementing this accounting for almost 80% of our assets under management. But we also see, together with Dasos is that we can further accelerate Dasos' growth, both by combining our fundraising capabilities, but also by supporting Dasos when it comes to fund administration, regulation, legal back office from our platform expert services, which then also enables scaling and growth. Together, we have already identified several joint development opportunities and opportunities for expanding the scope and over time, launching new products. Also, when we think about the sustainability part, so I think Dasos is a one-to-one fit with how we are thinking about sustainability at CapMan so creating stellar financial returns at the same time. And while furthering sustainability actions. And just as one example, Timberland is the only asset class that actually removes CO2 from the atmosphere and in that sense, can offset carbon intensity of some other asset classes. If we look above the fit from government's strategic focus areas, you can see from the highlights that this is a perfect fit. The Dasos team has delivered top investment returns through really active value creation in their investments, which is the same competitive advantage that we build on. This, if anything, is integrating sustainability at the core of every business activity. And also on the growth driver side, Dasos and CapMan joining forces is a textbook example on a new product area, a new investment area that fits into the portfolio that we already had and complement that and of course, a step on our growth ambition to the EUR 10 billion assets under management. Dasos will form the core of our new investment area for us, natural capital and will operate in the same way as our other investment strategies. So with the current team continuing to manage the Dasos funds and the natural capital funds as an independent team, but getting the full support from our platform, expert services and where needed also to support from our balance sheet investments where we can act then as an anchor LP in also new products. As already mentioned, this is -- has significantly towards our strategic growth targets. Immediately impact is some EUR 630 million fee paying assets under management that Dasos would add as of now. But also when we look at the growth projections going forward, we see that this is an important part of our growth on top of our existing strategies and products to reach those EUR 10 billion. If we look at our assets under management, EUR 5.7 billion in total when you combine the 2 entities, here, you can really see the split and 78%, so nearly 80% of assets under management in real assets, in real estate, in natural capital and in infrastructure. And there are also synergies and capability synergies across these like Olli already mentioned, new renewables being an important value creation stream in Timberland investments, but at the same time, something that our infrastructure team is already working on in their own product and really strengthening our position as a real asset investor. If we look at the investor base, similar to CapMan, Dasos already have a fairly international investor base, 45% of their LP is international and some of the most demanding really high-quality LPs in there, which really show the quality of Dasos investment operations. At the same time, there's very little overlap between CapMan's international investor base and doses, which means that there we see synergy potential in really being able to expand LP base internationally on both sides. Taking then a look on Dasos' key financials. So this is really a company that has been growing over many, many years. If you look at net asset value, so the value of Dasos' portfolio, over the past 4 years, a 13% per year growth currently at roughly EUR 1.4 billion. Revenue has been following this trend. So over the past 5 years, 12% per year growth. And revenue here is management fees from the funds that Dasos manage. They are 100% recurring and very high-quality. 90% of that AUM is either in evergreen structures or in funds that are -- still have 10 years of lifetime left in them. So very high quality assets under management and revenue stream and with a very scalable and profitable business model where EBIT just below EUR 3 million estimate for this year and has been growing even faster than top line and net asset values. When we think about the future already Dasos is on a very strong growth trajectory. And looking into the next year, I mean, a lot of fundraising has happened this year, which will turn into growth in next year and a history of growth. But combining our capabilities, we can really accelerate this. On one hand, our fund investor team, Fund Investor Relations, which is an international team. We see that they can support the Dasos team in fundraising and reaching an even broader set of institutional investors. Together, we can also joining our capabilities, expand into new natural capital products be then taking one step further into the renewables side, be it cooperation on the real estate side or totally new ecosystem services like Olli was already widely mentioning. Dasos already today has a pan-European investment portfolio, but we also see potential opportunities to expand the geographical focus there together. All of these 3 pillars then adding on the already good growth track of Dasos to really accelerate growth. If we look at the immediate impact. And from a shareholder point of view, what Dasos adds is about EUR 5 million of management fees, 100% recurring fees on very long-term contracts, like I said 90% either 10 years of lifetime left in the funds or evergreen structures, also a highly profitable business, adding some EUR 3 million of management fee profit or fee profit to CapMan. And on the earnings per share, positive impact if it would have happened during this year or early in this year, the transaction, the EPS impact would have been positive. Comparing this transaction to our long-term financial objectives, we can also see a positive impact. So clearly supporting our ambition to grow the management company and service business more than 15% per year. Our return on equity, a slight negative impact since we are issuing new equity, new shares in this transaction as the purchase price, but an equity ratio, a positive impact and no change to our distribution policy, policy to pay sustainable distributions that grow over time and always distributing the clear majority of our fee profit. So of course, with the growth growing also the fee profit. If we then look at more practical things and kind of immediate things related to the transaction, the timeline. So yesterday, we signed the agreement and we will now convene the extraordinary general meeting for CapMan to authorize the Board on the directed share issue. This AGM will take place on the 18th of January next year, and in parallel, are working on fulfilling the closing conditions for the transaction. So it is conditional on authority approvals, Competition Authority and the FIN-FSA. And it's also conditional on change of control consent from Dasos fund investors. All of this we expect to be in place during the first half of 2024, so that the transaction can close somewhere during the spring, the next year. A couple of words then on the extraordinary general meeting. As I said will be organized on the 18th of January. The purchase price for Dasos is EUR 35 million at closing and this will be paid majority with a directed share issue, 90% of the purchase price and a maximum of -- or approximately 9% of the EV than in cash consideration. In the EGM, the Board will seek approval for this directed share issue, and we have already obtained irrevocable undertakings to support the Board's proposal from 22.4% of our shareholders. This includes both our largest shareholder, Silvertärnan, and it includes the management and Board and some other shareholders, but already more than 22% of our shareholders supporting this transaction. And after the completion of the transaction, if we look at our largest shareholders, Dasos capital owners, current owners will own about 10% of CapMan shares and the investment team that continues to manage Dasos funds and forms the core of our natural capital operations are roughly 70% of that number, which means that we get from my point of view, a very strong alignment on interest between CapMan and the Dasos team and also a very good shareholder -- large shareholder in our shareholder base. But with this, I think it's time to conclude the presentation and open up for questions.

Thank you, Pia and Olli for a very insightful presentation. I'd like to remind you that if you would like a question, you may still do so through the chat box on the webcast website. And we have already received quite a few questions and for both Olli and for Pia and we'll answer as many as possible that we have time with them. But you are welcome, of course, to continue submitting questions throughout. So the first question comes from Sauli Vilen from Inderes. And this is a question for Olli. So he's asking that or wondering that whether CapMan was probably not the first company to approach you? And what was the reason that you chose CapMan?

Well, CapMan is the -- was the best company. So I think that is a short answer. And let's say that we have been quite happy as a stand-alone company over the years and -- but now gradually, Pia spoke about our growth, and we've been growing -- we've been -- we are currently present in 8 countries in investing. We have developed a good field for us to network, which is supporting us. And at the same time, it seems that we are now in a rapid process to also to diversify with -- between our investors. So all this adds up to more reporting, more compliance work. And there are now increasing, let's say, reasons to rationalize the scale economies and [ ally force ] is we're the leading player. So CapMan was a natural partner in that context.

And a similar question to Pia. You have probably also looked at several different options now this past year, why Dasos Capital?

I think for me, it's self-evident. This is, like I already said in the presentation, it is just a perfect fit strategically, but also getting to know the team, I think there is a very strong culture of fit between the Dasos team and CapMan. But this is really -- like I think I said a kind of a textbook example of what we've been looking for a stellar performance investment team who will benefit from our platform and platform expert services that we can support to continue to grow. And here, we also have the addition that there is synergies with our infrastructure and real estate investment team. So it's also on that level bringing synergies, it's furthering our sustainability, agenda and strategy and it's furthering our growth ambition. So really from all aspects, a very good fit.

Great. And then a question from Joni Sandvall from Nordea. And this is a question for Olli. So can you provide any additional information about current fund sizes by vintage and then maybe a follow-up question for Pia. When do you anticipate to raise the next vintage?

Yes. We started our most, let's say, recent fund 2021 and this an evergreen fund. We had -- just realistic to -- back to even to 2009. We always -- always with our investors, they had a -- there was always a discussion about having a very long-term perspective with forestry. And we have had a very longer-term funds than normally in the private equity segment. And now recently, what's -- the development has been that we've been encouraging the way to retain the assets, and we have now most of the capital either in an evergreen form or having at least about 10 years holding period to a mandate to future from now.

And on the fundraising, so this latest for fund the evergreen structure is the one that is currently fundraising and that we also look to at the first immediate step to support in fundraising and expand the investor base on.

And we have a question from Jerker Salokivi from Evli. And the question is for Olli. So how has the investor demand for Timberland funds developed during recent years?

That's a good question. Also, I had to go to, again, go back to history. When we started Dasos, 2005, this was really -- Dasos was most likely, if not the first one, one of the very first ones in Europe to address Timberland as an asset class, which was not existing. Timberland asset class was not known at that time. So if you look at the big trend, it has been so that more and more investors, especially European investors have arrived at this asset class. The asset class was actually already very well established before 2005 in the U.S. and to some extent, in some other Anglo-Saxon countries, especially Australia, but New Zealand, perhaps. But then in Europe, this was really a newcomer and the trend is that more and more investors are sort of as a normal roll book addressing the possibility to invest in Timberland.

And it's not correlating with inflation. It's not correlating with the macro as such. So it's a very steady investment. And I think combining that with sustainability, we actually see even more demand now for the asset class.

There's a lot of, let's say, research, especially in the U.S. by U.S. academics about the inflation hedge argument. And that seems to be robust. It's very robust, especially regarding unexpected inflation, and that differentiates Timberland from almost all other financial assets.

And the next question comes from Kasper Mellas from Inderes. So he's wondering about your estimate on the potential cost synergies and this question is for Pia.

So I think here, we are not coming out with a specific number on any synergies, but it's really what the synergies are, it's really scaling synergies and being able to, from our side, support Dasos with the platform fund administration, legal, et cetera, which means that the team can spend more time on actually value creating an investment. And then it's on the second part is around accelerating growth, combining our capabilities on fund investors relations.

And there's a follow-up question from Kasper Mellas from Inderes. Could you describe the roadmap for growing the natural capital investment area?

So we will -- like I said, the immediate focus is on the evergreen structure that's already out there and accelerating growth in that one. And then also we -- what we will do now before closing already is then creating the more detailed roadmap on what is the right timing then to go out with new products or expanding the investment mandate. So I think we will come back with a more exact roadmap at the moment, it's too early to put it in a timeline. But like I said, several ideas they are cooking already.

Perhaps I -- at one for the most recent fund, we actually still in the period of introducing the fund to market. And we are systematically now working already. We started this with Dasos, we hope we can accelerate this with CapMan to address systematically new let's say, geographic markets by making the fund available because for wider group of investors. So that's sort of the rough frame.

Yes, that's a good addition. So right now, it's been mostly introduced to local investors. But together, we will expand it [ rational ].

And then there's a question regarding the purchase price, and this is for Pia. So do you consider it a reasonable and a fair valuation in the current market situation?

Yes, I consider it a very fair valuation. And I think we can look at it from a couple of different angles. So first of all, if we think about it, on just stand-alone run rate at the moment, we're talking about below 13x operating profit valuation for based on this year, and we already know that there is growth coming for next year. And this is for a company that has really high-quality assets under management, which means a really high-quality management fee, 100% recurring fees and 90% of that in really long-term contracts, be it the 10-year funds that still have 10 years of lifetime or evergreen structures. So from that perspective, one angle on it. I think it's fair. And then looking at -- from the other angle, so Dasos already has shown throughout their history that they are capable to grow stand-alone. So already stand-alone, a growth case but then together being able to accelerate that. I think that as a third lens there, it's really, really a fair valuation, and we will be value creating to join forces.

There's a question from Sauli Vilen from Inderes. And this is a question for Olli. So could you describe the customer base of Dasos, for example, the number of clients, the average ticket sizes that these clients put in and whether there is an overlap between CapMan's client base and yours.

First of all, I think we are rather complementary for investor base. That's what been realized during the recent discussions. I think what puts us to sort of differentiates us -- Dasos from the beginning was that when we started Dasos first fund. We immediately addressed the, let's say, international or European investor community, and we were able to secure mandates. So we have been actually working with leading Central European and quite early on also Anglo-Saxon investors from the very beginning. And that's been a very important driver in this kind of, let's say, new asset class because to remember, when we started, Timberland was considered kind of exotic asset class. Now it's becoming like more like business as usual. But at the same time, it's not more the same Timberland, now it's natural capital and there's more into it. And we again need to grow with our investors and to diversify the asset base, also the products we are investing in and also the investor base.

There's the same logic, we both have investors that are large institutional long-term investors, but especially, internationally, the overlap with nonexistent basically.

And then there's a question from Kasper Mellas from Inderes. So the income generating AUM, so that was stated in the release to be EUR 630 million. And then that's compared to the sort of the net asset value of EUR 1.4 billion. And what explains the difference between these 2 figures. Maybe Pia can start and Olli can continue.

Yes, exactly because here, we have a situation where the ways we have been calculating assets under management has just differed between the companies. So the EUR 630 million AUM is the fee generated -- the fee base, which is the way that CapMan is calculating AUM. The difference to the NAV is the value that Dasos team has created in the portfolio, basically.

Yes, yes. And I'm not sure if there's a very limited debt actually, but I'm not sure if that is...

No debt in that it's really real value.

And maybe a follow-up question for Olli on this. Is all of the AUM is that all in Dasos funds, this EUR 1.4 billion?

All in Dasos funds.

Or is there something in funds that are not managed by...

No, no, no, it's all is in Dasos funds. We have, let's say, sort of main funds, and then we have co-investment instruments which are also structured in terms of funds and so on. But they all managed by Dasos. They might not all carry, let's say, Dasos name, but they might have local name like we have a Iris name in our Irish language, [indiscernible] and things like that but there still those Dasos funds. Dasos, by the way, means in ancient Greek language means forest. So it's our common inheritance in Europe.

And one follow-up question regarding the funds from Joni Sandvall from Nordea. So with the current funds that you have under management, are there big differences between the net IRRs?

There are differences, but I would not say great differences. It's basically because I -- the slide I presented about value creation is for me, it's a bit difficult to explain short because there are -- and it's general average picture of the situation, each assets vary. But on the other hand, the recipe, which is applied in order to add value is very much similar. And what we try to do is we have a different asset in order to diversify so between age classes and species. We hear about 10, 8 main species, we focus on. We have younger forest, we do a forestation, we acquired bare land and plant trees in that and expand the forest cover in Europe then we have mature stance. And then we do also consideration, which we -- which is a different kind of because you need to have broad leaves and the soil quality is important and things like that. But at the end -- on average, there are differences. But then on the average with the funds seems to be so plus minus 2%, 3%, the differentiation between the IRR figures. So it's -- they are in sort of narrow pipe.

That really convinced us as well that you have a very good portfolio construction in each of the funds and with that mix of assets, they are generating strong returns across the funds are very similar, like you say.

And then there's a follow-up question regarding fundraising for Dasos. So this viewer anticipates that you will receive lots of new investors through this cooperation with CapMan. And do you see a big growth for the fund currently raising in terms of AUM? That's the first question. And then how do you see the cross-selling synergies developing this -- you were discussing this a bit earlier, but is there anything else you would like to add?

I think the first thing is that our team, we have been very much dedicated to say, to forest asset management and building the -- so the sustainable silviculture regimes and also screen the assets for environmental values and setting aside conservation areas. And then let's say, parallel to that, we've been addressing investors. And I -- we just have noted that we need to, let's say, invest more into this client management. And I think that's very clear that CapMan has wide resources and more experience as well than we do have in that front. So I'm optimistic that we can materialize some benefits from this space.

That sounds great. And there is a question from Sauli Vilen from Inderes. And this is relating to deployment of Dasos funds. So how much capital can the team, the current team now deploy?

Yes. That's a good question. This -- what we look at -- we are now focusing at the moment, very much European Union area, which has been -- actually, from the beginning, we had and always -- even today, we have a global mandate, but it has been our own decision to focus on Europe and has been a very good one because Europe is in many ways, leading forestry region worldwide. Also in terms of new products by the industry, by processing industry, which encourages to invest and broaden the asset base. Also, the regulation, and I hope it will remain good, but it's been rather sort of optimal in order to guide development of new services. We still have the issue with carbon sequestration. And I think the modest the market could be developed further. But there is -- there are positive moves there. So if you look at Europe, why Europe? It's -- we have identified about the market in Europe for these assets we would be interested in is about EUR 3.5 billion per annum. So we think that -- and let's say, we have also a track on this that we can deploy sort of continuously about up to 10% of that market. And that would be perhaps also good for the market if there would be a little bit sort of bigger player taking a bigger role. So that's why we are in the middle of that process at the moment, and building up the deployment a little bit higher level. We've been deploying the best years over the history roughly EUR 200 million -- a little bit less, I think, than EUR 200 million last year's best 12 months period. And now we are -- we would like to go a little bit beyond that gradually.

Okay. And there's a follow-up question regarding the Dasos team. Are there any plans for the team. Will the current team now continue in the same capacity? And what's the commitment to continue in this current setup together with CapMan?

Well, we maintain our inspiration to work with forestry and we are committed to work and continue. And let's say, although it sounds surprising, but it's -- in terms of investment and forestry this is business as usual, and we hope that we can get more additional resources now, but we go ahead with full steam.

[Operator Instructions] We still have one question here from Kasper Mellas from Inderes. And this is regarding the mix of Dasos revenues between 2021 and now 2023 expected revenues. What's the share from continuous management fees? And what's the share from performance fees?

That's all management fees.

This is all management fees, yes.

So it's all 100% -- so in a CapMan context or how we term things, it's all 100% recurring management fees.

Yes, in those figures.

Yes, in those figures.

Yes, they're not including...

And then [indiscernible] interest is, of course, separate.

And then there's a question for Pia and this is regarding the fit with Dasos Capital with CapMan. How do you see this strategy fitting with the existing investment strategies that you already have? And you, of course, discussed that a bit in your presentation already. But are there -- is there something that actually provides additional synergies like with the existing strategies. And at the same time also, are there any cultural synergies that are to be added from this?

So I think I mean the fit is good. It's complementing. So if we start from the investment strategies. So first of all, I think this is a very natural addition, but it's also one area that we were missing in our investment strategies so in natural capital. At the same time, it's complementing and there are synergies and there's capability synergies when we think about infrastructure, where our infrastructure team is already part of driving the green transition and renewable investing, and Dasos again has on their Timberland, the opportunities to develop wind and solar. And here, combining the knowledge is clearly synergistic. And you can also, on the other side, maybe less intuitive, but still wood construction, for example, and really understanding how to kind of where the wood is coming for, how do you really kind of, for example, calculate on the emission there which is interesting for the real estate team and the real estate team and the real estate team can add capabilities there. So they are complementing from that point of view. And when it comes to the culture of it, I think we have spent quite a lot of time together getting to know each other and the teams. And my expectation is that it will be quite natural and really strong fit also on that side.

And we have a question from Joni Sandvall from Nordea. So this is for Olli. So given the renewable energy pipeline in Dasos, how large revenue potential do you see within the next 5 years?

Yes. That's also -- I don't -- so we -- first of all, we have materialized some revenue already from the pipeline which is like this year, in some cases, is concrete and substantial. I mean the way we address renewable energy is that we systematically try to consolidate areas, which are suitable, more suitable for actually for wind parks so that we can provide land platform, which is -- facilitate investments in several wind turbines at the same time. So a single owner can host several wind turbines. This is rare in the European context because normal -- the forest ownership in Europe is I think, about 12 hectares or even smaller. In Finland, it's 30 hectares, in Sweden, it's 50 hectares but this means that the normal, in one winter one needs as intake area, at least 50 hectares, normally actually in practice about more than 100 hectares. So if you want to supply land infrastructure for wind park. You need in practice on -- at least hundreds of hectares in approximate -- short proximity of an area perhaps as one entity. And so that's what we try to do. And this is also a service which we charge a fee from the renewable industry investors because we kind of established the land infra for bigger parks, which facilitates faster investment on weaker parks. So -- and then on the other hand, there is, of course, the one that we have a profit sharing agreement regarding the green energy at the end produced. There are certain standards that -- so forest land is becoming a source of green energy, not through biomass only, but through wind and solar. And on the top of that, it's -- and we have to remember that if you want to compensate the nature of especially the nature of this wind parks, we are able to provide solution and conservation from our habitat bank is areas which conservate the biodiversity major footprint of such a big investment.

Maybe it's kind of -- just maybe it's clear, but just maybe some clarification also that when we talk about this revenue from the wind parks or this profit sharing or additional fees. This is exactly the value creation in your funds that you were talking about earlier so this is what benefits the fund investors. It's not Dasos Capital revenue but it's really what creates the value in the fund just not to mix those 2.

Exactly. So it's additional revenue stream. And what is it an average difficult to say, but let's say, for certain areas where we have these wind parks. It's -- it can be up to 30% of the -- so it can add the revenue, the forest land is generating quite substantially. So it's not a small contribution.

Then we have a question regarding investor demand. And this question is for Pia. So do you see demand from your current LP base into forest and Timberland products? Has there been discussions with the current investor base? And have you already now seeing any commitments, even soft commitments into forest funds or to Dasos fund.

Well, I think we signed and announced this yesterday. So between yesterday evening and today, I'm not aware of any new commitments. But on the other hand, I haven't talked to our Fund Investor Relations team yet. But yes, we believe that there is a growing demand for this asset class for different investors, it's for different reasons. So for some, it is a small allocation that is stabilizing their total portfolio because you have this inflation hedge, you have this very stable returns in it. For some, it's in addition or just a way to also compensate on emission side. For example, if you have a large portfolio, and you have a target to reduce emissions or reach net 0 emissions. This is an asset class that has a negative. It's a sink -- CO2 sink, so balancing that. And then also with this additional value creation streams in forestry, I think that makes it also more attractive to a broader range of investors than the pure Timberland management. So for various reasons, yes, we strongly believe there is a growing appetite for this asset class.

Then one final question. We are nearing noon. So it's time to start wrapping up. But this is to Pia. So there's a question regarding the acquisition and an impact on CapMan's dividend and distribution, either policy or plans, is there an impact?

No. So this acquisition does not change anything when it comes to our financial outlook for 2023 or the distribution policy or the expected proposal on distributions that the Board expected that we came out with the end of October. So no changes to 2023 or policies from our perspective, going forward, a strengthening of our long-term targets, but no impact on '23.

Thank you very much. This has been a very insightful, interesting discussion and presentation. It's time to wrap up this press conference and thank both Pia Kall and Olli Haltia for their time. And that concludes this presentation. And I would like to ask -- to wish you a very pleasant rest of the day and happy holidays.