The fund managing the wealth of the billionaires behind Lego A/S is planning to step up investments in renewable energy.
What started half a decade ago as an idealistic project to cancel the toymaker’s carbon footprint is now beginning to make much more financial sense for Kirkbi A/S, which has $16 billion in assets under management.
“We see this as an investment area,” Soren Thorup Sorensen, Kirkbi’s chief executive officer said in a phone interview from western Denmark. “I’m very pleased that after beginning with this back in 2012, it’s starting to show up on the profit line.”
Profits from the fund’s investments in renewable energy assets more than tripled in 2017, to 398 million kroner ($66 million). Kirkbi already owns stakes in German and U.K. offshore wind parks, but Sorensen says it may expand into other areas.
“The competition for the good projects has grown a lot bigger,” he said. “Therefore we may also look at other technologies, including solar energy, which has now become a lot more efficient.”
Kirkbi manages the wealth of Lego owner Kjeld Kirk Kristiansen, who is Denmark’s second-richest man. In 2017, it met its goal of matching Lego’s energy consumption with an equivalent production of green electricity (and did so three years ahead of plan).
Generating electricity from fossil fuels is fast becoming less economically viable as renewable energy technology drops in costs, according to a report published last month by Bloomberg New Energy Finance. In most places, wind and solar will be cheaper than coal by 2023, according to the research group.
“We started very early, but looking at renewable energy today, there are many, including pension funds, who are eager to invest,” Sorensen said. “We have now built up some expertise in this area at Kirkbi, and are now looking at whether this gives us the opportunity to make further investments.”